Over-dependence on Oil, Bane of Nigeria’s Devt, Says Lai Muhammed

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Hammed Shittu in Ilorin

The Minister of Information and Culture, Alhaji Lai Muhammed, has attributed the current economic recession in the country to the nation’s over-dependence on oil.

He said such development has also impeded the economic growth of the country.

Speaking with journalists yesterday at his country home in Oro, Irepodun Local Government Council of Kwara State, Muhammed said: “The prevailing economic situation is not about trading blames as being experienced in some quarters in the country. Those who understand know that this recession was bound to happen in such circumstance.
“The crash in global price of crude oil has exposed the country’s defective economic policy, with oil accounting for over 60 per cent of the nation’s Gross Domestic Product (GDP).”

The minister stated that the situation was further compounded by inadequate reserve to cushion the effect of oil ‘misfortunes’ on the country.

“We have a very defective economic structure which depended largely on a single platform of crude oil and fuel.
“Crude oil accounts for between eight and 12 per cent of our GDP and another 53 per cent of the GDP which we call non-oil, unfortunately, also depend on the same oil.
“When the price of oil eventually crashed in the international market, definitely, you are bound to have this kind of shock in the economy,” he said.

The minister decried the citizens’ preference for imported goods to local ones, saying substantial amount of the country’s foreign exchange earnings were being expended on importation of goods and services.
Muhammed also blamed the past administrations’ inability to achieve massive investment in infrastructure in order to assist manufacturing industries and boost agricultural production for part of current problem.
According to him, “Such inadequacies are responsible for the socio-economic imbalance being experienced in the country today.”

The minister, who acknowledged that there was growth in the nation’s economy between 2010 and 2014, however, said the growth was only fueled by consumption.
“The growth was not fuelled by production or fuelled by investment; that explains why it was short lived,” he added.

Mohammed said the present administration efforts to correct past anomalies could not be felt immediately because the rots in the system were too enormous for short term remedies.
He disclosed that the administration inherited a whooping debt of N67 billion on fertilizer procurement alone.
The minister listed part of the administration palliative reforms to include massive investment in infrastructure and agricultural production.

“People say we should not talk about what happened yesterday but it is pertinent to learn, understand and move away from past mistakes.

“In the whole of 2014, the then government expended about N18 billion on roads, but spent N35 billion on travels, this year alone, we have spent N70 billion on roads.

“People ask why all these steps have not been felt immediately; it is because the last government refused to pay contractors between 2012 and 2015 even when crude oil was selling at $100 per barrel.
“Out of the N70 billion being owed Julius Berger, we have paid N14 billion.

“If the government was not owing Julius Berger in the past and we paid N14 billion to them, you would have seen them busy on the roads,” he said.

Mohammed said ‘Change Starts with Me’ initiative launched by the federal government last Tuesday was to instill discipline and the needed change of attitude of both the leaders and the led.

According to him, such remained the basic foundation and driving force to actualise the socio-economic transformation for the country.

“Nigerians have to change their attitude from the past; it is not only about the leaders but also the followers.
“This is the only way we can achieve our desired progress, growth and development.”