Economy News Op-Ed

Crude Oil Palaver, A Blessing To Nigeria’s Economy

Crude Oil Palaver, A Blessing To Nigeria’s Economy
  • PublishedJuly 20, 2017

By Wasiu Babalola

The Nigeria’s Economy is suffering a great setback as a result of the downturn of oil price in the international market and domestic activities of some vandals on crude oil pipelines, as well as other factors.

These would have been an avoided devil on our economy; peradventure we have not relied solely on crude oil as the staple source of revenue generation in the midst of various viable means.

With the abundant human and natural endowments bestowed upon us in Nigeria, we stand a chance to take a lead among economically viable nations, but for our inability to see beyond oil as means of survival.

Is it not rather funny to say that our present economic predicament caused by the downturn of oil price in international market can be said to be a blessing to Nigeria economy? A reference is drawn here to some states of the federation with the emphasis on the State of Osun in particular where the deficiency being currently experienced in oil sector is being turned into fortune with the help of the ingenious prowess of Governor, Ogbeni Rauf Aregbesola through sourcing for the state’s livelihood with the introduction of various palliative measures in virtually all societal sub-sectors under the acronym “O Scheme” initiated by the incumbent administration.

It is pertinent to note that in Nigeria, we hardly think of the bridge, until we get to a river. Now, the oil sector has failed in addressing the continuous need of our economic stability, hence, the need to diversify into other sectors that are yet untapped to the fullest like tax networking system and where we are having economically comparative advantage over other countries, also importantly is the agricultural sector that can efficiently sustain us for years.

If we recall, before the discovery of crude oil, precisely when Nigeria was in three regions – Western, Eastern and Northern, each of these three regions based their farming activities on where they had advantage over one another. For instance, Western region concentrated on cash crops, Northern region on groundnut and cotton, while Eastern region was known with palm oil production. The Agricultural sector was the pivot of the Nigeria’s economy then. Our agricultural products were so in abundance to the extent that, they were able to sustain the whole domestic population and at the same time earned us good foreign exchange in the international market. This of course really helped the Nigerian currency to stand side by side the dollar in value.

Although, the country was not as densely populated as it is now, notwithstanding, if we are able to tap the potentialities of the population, nothing stops us from being at par with a country like China in terms of economic development. As the most populated country of the World, China has proven it wrong through the significant level of the voluntary tax compliance among its taxpayers and the  dominant roles their products play in international market that, population is not a barrier to development, rather, the population is seen as an endowed opportunity for a country to develop by capitalising on.

At this juncture, another area in which a sincere government – Federal, States or Local needs to step up its statutory responsibilities is in the area of empowering the youth. The youth forms about 60 per cent of the productive sector of the Nigeria’s population and if they are properly engaged, they could be a source of revenue in the tax drive of the nation.

For instance, there are about 17 million small and medium scale enterprises scattered through the length and breadth of the country that are in need of one thing or the other, especially enabling environment for the successful transaction of their businesses, such as stable supply of electricity to carry out their day to day business activities as well as getting soft loan from government through empowerment scheme to complement the financial stands of their businesses. The provision of these would enhance the realisation of more revenue for the government from this sector as they would be financially comfortable and have no excuse to compromise tax when they are to pay tax, being the civic duty of every earner of income.

It is therefore high time all the three tiers of government in Nigeria woke up to these challenges by earmarking a larger percentage of the yearly budgets to the agricultural sector to encourage urban-rural migration. Likewise, the dominating percentage of youth in various productive sectors in Nigeria and their potentials calls for the attention of government, especially in the area of engaging them through a sincere empowerment scheme, to add value to our economic viability in Nigeria. This will surely step our feet on the path to economic development.

Babalola is the Information Officer, Osun Internal Revenue Service.

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