Oil will continue to dominate Nigeria’s economy despite diversification- Report

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(Last Updated On: 2016-10-13)

Nahimah Ajikanle Nurudeen

Projections in the report launched by the global publishing, research and consultancy firm Oxford Business Group (OBG) suggest that petroleum and its by-products will continue to dominate Nigeria’s economy for several years, despite the ongoing diversification drive.

The report which was presented to the business community at the Nigeria Economic Summit Group (NESG) annual conference this week charts the measures implemented by the government aimed at boosting non-oil exports, which include fiscal incentives for targeted industries, together with a N300bn ($947.1m) export stimulation fund for the Nigerian Export-Import Bank.

The report also shines a spotlight on non-oil exporters that are delivering strong performances, despite lower overall international sales, such as the vehicle and vehicle parts sector.

Nigeria’s plans for tackling a difficult period of slower growth triggered by the impact of low global oil prices are explored in the new report.

Exchange rate uncertainty and other weaknesses in the economy have exacerbated Nigeria’s economic problems, pushing down growth from 6.2% in 2014 to 2.8% last year, according to the country’s National Bureau of Statistics.

The Report: Nigeria 2016 explores the government’s drive to stimulate growth by channelling additional funding into targeted sectors of the economy, such as transport, power generation and transmission, health and education. Overhauling the country’s road network and improving the national pipeline network both feature on its agenda.

The publication also provides coverage of the Buhari administration’s wide-ranging plans to tackle corruption and government waste through measures that include restructuring initiatives for key public institutions.

The Report: Nigeria 2016 contains a viewpoint by President Muhammadu Buhari, together with a detailed, sector-by-sector guide for investors.

It also features a wide range of contributions from other leading representatives, including the Minister of Finance Kemi Adeosun, the Governor of the Central Bank of Nigeria Godwin Emefiele, the Managing Director of the IMF Christine Lagarde and Razia Khan, the Chief Economist, Africa, at Standard Chartered.

Andrew Jeffreys, OBG’s CEO and Editor-in-Chief, said that while the problems Nigeria faced shouldn’t be underestimated, the government’s budget for 2016 signalled a commitment to spurring growth in what has traditionally been one of the continent’s most popular investment destinations.

“Business leaders who are already aware of Nigeria’s economic potential and abundant resources will note with interest the government’s plans to increase capital spending in the current fiscal year and beyond,” he said. “With the creation of jobs and further diversification of the economy both priorities for Nigeria, the opportunities for investors who are prepared to stay for the long haul are considerable.”

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OBG’s Managing Editor for Africa Robert Tashima agreed that even though challenges, ranging from a recession to a depreciating currency and troubles in the Delta, presented problems for Nigeria, the country still held expansive long-term potential in a number of sectors. “The coming months will require canny navigational skills from investors,” he said. “However, Nigeria continues to offer attractive fundamentals, including a large population, fast-rising consumption and a robust private sector.”

The Report: Nigeria 2016 marks the culmination of almost a year of field research by a team of analysts from Oxford Business Group. The publication assesses trends across the economy, including macroeconomics, infrastructure, banking and other sectoral developments. The Report: Nigeria 2016 has been produced with the Nigeria Investment Promotion Commission, the Nigerian Economic Summit Group, Ajumogobia and Okeke, FBN Capital and SIAO. It is available in print and online.

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