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Economists harp on diversification of economy from oil

An Economist, Prof. Akpan Ekpo, has advised that the Federal Government to do more to restructure the economy through industrialisation in favour of production, so that the country would earn more foreign exchange.

Ekpo, a Professor of Economics, University of Uyo, gave the advice on Thursday in Lagos at a webinar organised by the Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos.

The webinar had the topic: “Implications of the 2020 Federal Budget Reviews”.

According to Ekpo, much uncertainty and volatility on the oil sector had made the diversification imperative.


“Going forward, we need to change the structure of the economy, promote diversification and accelerate the pace of our economic recovery to enhance competitiveness.

“Let us not forget that our economy was not in good shape before the pandemic as we were still in stagflation stage with rising and disturbing unemployment rate, double-digit inflation and sluggish and fragile growth.

“Growth in 2019 was about 20 per cent while in 1st quarter of 2020 it stood at 1.87 per cent’” Ekpo said.

The economist said that reliance on oil revenues to finance development was unhealthy for the economy.


According to him, it should be treated as a windfall and targeted at infrastructural development.

He urged the Federal Government to reset the management of oil resources.

Prof. Olu Ajakaiye, Executive Chairman, African Centre for Shared Development, Capacity Building, Ibadan, said at the event that Nigeria’s economy was facing crisis due to the crash of oil price.

He said that the crisis had made the government to rely more on borrowing.


“My concern is that excessive reliance on borrowing to finance a budget makes it unreliable because we may not get that much and even if we get that much, corruption will not allow it, despite government efforts,”he said.

A public sector economist, Dr Isaac Nwaogwugwu, said that growing debts would be a problem in the future.

“We do not even know the conditions that are attached to the loans we are getting, nor the conditions attached to repayment.

” If you look at it in a wider perspective, you will begin to raise some issues and ask some questions, one of which is whether the future generation is protected or not.


“The government has a responsibility to protect the lives and property of the citizens and at the same time has a huge responsibility in safeguarding national resources for the benefit of the generation unborn,” Nwaogwugwu said.

The News Agency of Nigeria (NAN) reports that the economists also discussed the role of the National Assembly and the budgetary institutions.

They said that issues such as rubber stamping of the budget, budget padding and corruption posed dangers to the economy and needed to be tackled. (NAN)

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