A financial market analyst has stressed the need for the government to create policies and incentives that would promote non-oil exports by Nigerian firms.
Senior Consultant/Chief Executive Officer, RTC Advisory Services Limited, Mr. Opeyemi Agbaje made this call while speaking on a theme: “Review of 2014 and Projection for 2015,” at an event organised by the Finance Correspondents Association of Nigeria (FICAN), in Lagos yesterday.
He pointed out that although the current structure of Nigeria’s Gross Domestic Production (GDP) shows that the country has achieved significant diversification in terms of local production and consumption, there is need for Nigeria to be competitive in the area of non-oil export of goods and services by the private sector.
Agbaje cited the case of South Africa, whose export revenue is driven largely by private sector firms such as MTN, DSTV, South African Breweries, among others.
He explained: “So, the challenge for the Nigerian economy is for government to create policies and incentives that will allow our private sector to become exporters. If our export revenue was earned by thousands of Nigerian companies exporting their services, we would not collapse anytime the price of oil falls.
“We also need to start refining our oil domestically and exporting it. We should be one of the biggest exporters of refined petroleum products in the world.
“There are significant opportunities in Nigeria. If you look at the structure of Nigeria’s GDP, you will see that huge opportunities abound in Nigeria.
“In terms of the structure of domestic production, we have done a good job of diversification, but the problem is that in terms of the structure of export and government revenue, we have not done enough.”
Agbaje pointed out sectors such as e-commerce, entertainment, real estate, food, beverages and tobacco, cement, hospitality, hotels and construction hold a lot of opportunities for the diversification of the economy.
According to him, once the power sector investors completes the restructuring of their debts, the country should expect improved investments in the power sector which is expected to boost energy supply.
“Periods of difficulties as we all found in our private lives are not gloomy periods. They are periods of opportunities, investments, hard work and in making the necessary investment decisions,” he added.
Furthermore, he has said that the falling prices of crude oil in the international market has placed Nigeria in a situation where policy makers must restructure the economy.
“This is the type of restructuring whereby you don’t have any choice, but to it. Analysts and columnists have over the years been advising on most of these things, but now, we don’t need to advise anybody.
“Whether government likes it or not, we will have to deal with the issue of the Nigerian economy. We would have to diversify the economy, reduce the size of government and increase investment in alternative sectors whether we like it or not.
“The oil price is still falling and we don’t know where the exchange rate is heading to.
“But the reality is that whoever wins the election by February 14, 2015; and whoever comes into office by May, will have to deal with serious economic issues,” he added.
(Culled from http://www.thisdaylive.com)