President Muhammadu Buhari has alerted that the recent crash in oil price due to coronavirus outbreak has affected the ability of government to meets its obligations on infrastructure and human capital needs.
He raised the alarm at a dinner he hosted on Wednesday night following the conclusion of the Going for Growth 2:0 round table session organized by the Central Bank of Nigeria (CBN) in Abuja.
He said this was so because of the 60 per cent dependence on revenues from crude oil export.
The president said this external challenge underscored the need to diversify the nation’s economy.
He said: “The onset of the coronavirus in December 2019, which has spread to over 100 countries is having a significant impact on global growth, as well as commodity prices such as crude oil, which has dropped by over 45 per cent since January 2020.
“These external challenges have only served to reinforce the importance of ensuring that Nigeria is self-sufficient in the production of strategic goods.
“They have also highlighted the fact that we need to continue to implement measures that would enable growth in other sectors of our economy and reduce our dependence on earnings from crude oil. For these objectives to be achieved, the vital role of the Nigerian private sector cannot be disputed or overemphasized.”
Buhari assured that his government remained steadfast in seeking to promote the growth of the Nigerian economy, and by extension the growth of the Nigerian private sector.
He expressed delight that following recent recession and supported by growth-enhancing fiscal and monetary policy measures, GDP growth has remained in positive territory for the past 11 quarters, saying that the positive growth has been driven by growth in key sectors of our economy such as Agriculture, Industry, Oil and Gas, as well as ICT.
According to him, a key focus of his administration has been a diversification of the Nigerian economy and improving Nigeria’s level of self-sufficiency in food production.
“These measures would help support faster economic growth, create employment opportunities for our teeming youths, and reduce our import bill,” he added.
Buhari said he was also happy to note that Nigeria has made some progress in its diversification plans and in creating an enabling environment for the private sector to thrive.
He further stated: “In the agricultural and manufacturing sectors, we have seen substantial improvements in the cultivation and processing of key staple commodities such as rice, maize, cotton and tomatoes.
“We have also worked to improve access to finance for businesses in the agriculture and manufacturing sectors. Access to credit is often cited as a constraint to the growth of farmers and small and medium-sized businesses. Over the past 10 months, we have seen significant improvements in credit to support the continued growth of our economy.
“I am aware that lending rates by banks to farmers, small businesses and manufacturers have been lowered over the same period. These measures along with aggressive efforts at rebuilding our road, rail and power infrastructure, will help to reduce the cost of doing business in Nigeria and promote faster growth of our economy.
“Apart from the successes we have recorded, I admit that challenges do remain. Given our dependence on crude oil revenues for close to 60 per cent of government revenues, the recent decline in crude oil prices affects our ability to meet the infrastructure and human capital needs.
“Also, with annual population rates, we must continue to support growth in sectors that have the ability to absorb the employment needs of our growing population. With our vast arable land as well as population, ample room for growth exist in our agriculture and manufacturing sectors.”
The president welcomed continued collaboration with the private sector, assuring that the recommendations provided in the round table on ways in which the private sector can support growth in key sectors such as Agriculture, Manufacturing, ICT, and Finance are necessary if the country is to achieve double-digit growth of our economy.
He assured that his government would pay close attention to the session’s recommendations, as part of efforts towards developing policies and programs that will enable improved economic growth and creation of jobs.
In his remark, the governor of the CBN Mr Godwin Emefiele disclosed that the private sector has agreed to mobilized about N1.2 trillion to support the federal government in the development of critical infrastructure in the country to enhance economic development.
He said the money will be raised through a Special Purpose Vehicle (SPV) working with the Federal Government, and key development finance agencies.