The Second Deputy President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Dele Oye, in this interview with Dike Onwuamaeze, underscores the need for the federal government to diversify the economy. Excerpts:
Nigeria has always relied on oil for a long time, what will be your advice to the government on the need to diversify the economy?
In the past four decades, crude oil has contributed substantially to Nigeria’s revenue since its discovery.
However, it is a known fact across the globe that for a country to attain growth and development, its economy has to be diversified. Diversification does not occur in a vacuum. Mono-economy needs to give way to the productive development of various sectors of the economy. The fall in the price of oil in 2014 when it crashed from $115 to below $70 per barrel showed that Nigeria cannot sustain large earnings or revenue from this sector and the future is far from rosy. As a matter of fact, there is an urgent need for the Nigerian government to seriously pursue the diversification of the economy so as to attain solid economic growth.
Nigeria recently signed the African Continental Free Trade Area agreement, what do you think are its benefits for the country?
The key objective of AfCFTA is to boost intra-African trade through progressive elimination of tariffs and non-tariff barriers to trade in goods and liberalisation of trade in services. The agreement will also involve cooperation on investment, intellectual property rights and competition policy. Benefits to be derived will depend on competitive advantage. Nigeria will likely have high production cost due to inadequate and poor infrastructure. Internal infrastructure needs to be improved fast to encourage export of goods. If there’s a labour component, Nigerians will benefit given the large population of the labour force which will flow to neighbouring countries to procure jobs
How can Nigeria benefits from the untapped opportunities in the nation’s agriculture value chain?
In spite of the oil, agriculture remains the base of the Nigerian economy, providing the main source of livelihood for most Nigerians. The sector faces many challenges, notably an outdated land tenure system that constrains access to land, a very low level of irrigation development, limited adoption of research findings and technologies, high cost of farm inputs, poor access to credit, inefficient fertilizer procurement and distribution, inadequate storage facilities and poor access to markets have all combined to keep agricultural productivity low with high postharvest losses and waste. Even though agriculture still remains the largest sector of the Nigerian economy and employs two-thirds of the entire labour force, the production hurdles have significantly stifled the performance of the sector. Opportunities in agriculture are not in basic production but in processing, which requires electricity. Fully developed commodity exchange is required to optimise the market. Standardisation is essential for international trade. Efficient transport infrastructure is required for competitive pricing.
How do you think Nigeria can regain its former place as a major supplier of palm oil to the world?
The country need to be focused. It has to expand production by investing in increasing total land area under cultivation. There should also be a deliberate and conscious effort aimed at expanding milling and refining facilities to meet up with expected additional output. There is also a need for skilled and knowledgeable agricultural personnel across the country that would in turn bridge the gap of Nigeria’s large infrastructural deficit.
The government and the private sector should also be determined to improve the industry’s knowledge gap via focused recruitment, training of extension workers, aggregating small hold farmers’ production as well as privatising Nigerian Institute for Oil Palm Research (NIFOR) to catalyse industrial growth and productivity. Most importantly, Nigeria should encourage agriculture by investing and empowering the organized private sector, individuals and groups who are considering agricultural projects.
The CBN recently announced its decision to restrain importers of milk from the interbank foreign exchange, how can this impact positively on local production of milk and the economy?
With the restriction of forex for milk; foreign milk will be more expensive in the market as importers pay more for forex. This will lead to local milk becoming more competitive. It will protect the local producers who may expand capacity. However, the policy needs to be consistent to yield lasting results. We also need to be sure that there is sufficient local capacity to meet local demand.
How can Nigeria attract more investment into its property market and generate employment opportunities?
The property market is a very massive and viable. The government, through its statutory ministries and agencies, should endeavour to create an enabling environment for the operators. There should also be a review of the Land Use Act. The Land Use Act remains as the most controversial legislation act in Nigeria. A lot of stakeholders still describe this Act as the one that cripples the economy of the entire nation. A lot of experts have suggested that the Act should be overviewed! Moreover, this Act should be removed from the Constitution.
If it remains in the constitution without being reviewed, then Nigerians should expect major growth in the real estate industry. How can you create a strong and stable growth if the land is under the control of the state governors? It`s necessary to amend the Act to change the situation for the better. It makes land very expensive. In the past, you could just purchase a piece of land from a community or individual and register it in the Land Registry. Therefore, you could get the bankable document almost in no time for the adequate price. But today, the process has changed. Also, the mortgage market must be developed to foster macro-economic stability. Another important factor is also the need for a simple digit inflation and adoption of advanced building technology to bring down costs of building.
What do you think government should do differently in providing affordable housing to Nigerians?
Nigeria has a low homeownership rate, lower than that of Indonesia (84 percent), Kenya (73 percent), and South Africa (56 percent). The major issues that continue to affect housing in Nigeria include constraints related to the high cost of registering and securing land title, inadequate access to finance, slow administrative procedures, and the high cost of land. The government must also ensure a stable macroeconomic environment and check high inflation rates and astronomical nominal interest rates in order to achieve its affordable housing policy,
What will be your advice to the government to do to close the housing deficit in the country?
The fundamental issue is that the purchasing power of the population is too low. It is not majorly a financing problem. Capital can easily be imported.