Literature and economics are two areas that hardly relate to each other but in Nigeria, the adage, “it’s darkest before dawn” certainly is revealing itself in its wholesomeness in the country’s economy.
After years of waning economic fortunes, Nigeria is on the path of recovery.
Nigeria is one of Africa’s economic powerhouses. The population of the country is high, the land relatively small regardless, it’s one of the few countries on the African continent which has managed to entirely eradicate absolute poverty. In recent years though, Nigeria’s economic performance went on a downward spiral.
The recent ‘Where to Invest in Africa Index’ report released by the Rand Merchant Bank shows that the effects of Nigeria’s recession are to some extent still being felt though the country has fully recovered. Nigeria was displaced from the top ten countries, taking the lowly 13th position. Nigeria also slipped two places on Ernst and Young’s Africa Attractiveness 2017 Index from position 15 in 2016 to position 17th in 2017.
Speaking at a press briefing during his tour of China, the President of Nigeria, Muhammad Buhari, said the past year has been one of solid economic progress for his country. Nigeria recovered from a 15-month long recession that threatened to curtail and reverse the gains the country had made.
In giving his overall analysis of the recession, Buhari said a lack of diversification contributed immensely to the country’s inability to emerge more quickly from the recession. Nigeria is Africa’s biggest oil producer; it over-relies on crude oil exports, the plunge in crude prices from 2013 onwards impacted heavily on the country’s economic performance.
For this reason, he said he is looking at measures to diversify the economy so as to prevent such vulnerabilities.
The massive drop in oil prices resulted in a fiscal crunch that forced Nigeria to transform its economy. Buhari stated that economic transformation is no easy feat but they are going to take it one-step at a time. He said the approach that the country is to take is holistic and inclusive incorporating a variety of measures. For instance, Nigeria drafted the Federal Government’s Economic Diversification Plan economic blueprint, which aims to balance Nigeria’s economy away from oil production.
The Federal Government’s Economic Diversification Plan sets ambitious goals for the next five years. It looks to increase the share of non-oil exports from the current low of just 10 percent to 50 percent by the end of the five-year period. The plan also sets measures to increase the private’s sector contribution to the Gross Domestic Product from 30 percent to 60 percent in its first two years of implementation.
The Economic Diversification Plan states that it wants new actors’ involved in the economy apart from those already involved for it to be a success. The government calls for the ambitious millions of young Nigerian people to take part in the diversification drive.
The Economic Diversification Plan is guided by three key principles: one is building a skilled and future-proof labour force secondly is utilising digitalization and the last one is upgrading the strategic management of local enterprises.
Among the sectors to be prioritised is the agriculture sector, Nigeria wants to increase its tea production. Buhari recently signed a partnership deal with the Sri Lanka government that will see it helping small tea producers in the countryside increase their output.
This partnership will see an increase from the current 11 percent to 20 percent in land area under cultivation. Subsequently, the employment numbers will rise from the current 22 percent to a projected high of 40 percent.