17 August 2011, Sweetcrude, Abuja – Moves by the Nigerian government to diversify sources of income for the nation’s economy from oil may have began to yield fruits, going by figures released by the National Bureau of Statistics (NBS).
According to the NBS, the contribution of oil to total exports in Nigeria in 2010 stood at 70.4 per cent, an improvement from 84.5 per cent, 91.555 per cent and 92.95 per cent in 2009, 2008 and 2007 respectively.
This showed that the contribution of oil to exports was declining in line with recommendation by experts in the financial service sector and on account of the government’s policies to grow non-oil sector of the economy.
A further analysis of the NBS numbers showed that the United States (US) contributed about 35.875 per cent to the total oil exports.
This, experts said, meant that the economic developments in the US directly affect Nigeria’s ability to generate revenue from oil.
Consequently, analysts at FSDH Securities Limited, warned that Nigerian economic managers needed to make more efforts to ensure that contribution of non-oil exports increases in order to insulate the economy from the volatility in the oil market.
In their weekly review of the nation’s economy, the analysts noted that the recent volatility of the price of oil in the international market should be a constant reminder of the need to maximise the benefits accruing to the nation from the sale of crude oil.
“We believe that the establishment of the Sovereign Wealth Fund (SWF) is capable of achieving the desired objectives, but we note the possibility of less than optimal accretion to external reserves, which is capable of derailing the objectives of achieving price stability in the Nigerian economy.”
FSDH therefore, recommended that the FG should encourage the development of mechanised and commercialised farming in Nigeria in order to turn the potentials in the sector to job creation and revenue generation for the country.
The analysts stressed that the government should guarantee demand for agricultural produce at pre-determined minimum prices in order to encourage production.