Commentary: Importance Of Proper Diversification Of The Economy
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Nigeria – At a one-day special summit on the economy recently, the Vice President of Nigeria, Professor Yemi Osinbajo, and the Director-General, Budget Office, Mr. Ben Akabueze, called on foreign investors to invest massively in the country. They also appealed to the private sector players to synergize with government to bridge the yawning critical infrastructure deficit, which, they said, remained huge burden.

It is reassuring that the federal government, in liaison with the Central Bank of Nigeria, CBN, has churned out series of policy measures aimed at resetting the economy.

The global COVID-19 pandemic has made Nigerian political leaders to be conscious of building a resilient economy with great stress on the health sector at sub-national level of government. However, the fact must be recognized that any measure for repositioning the post-COVID-19 fragile economy should stop the deceptive rhetoric on the diversification of the economy.

The fact remains that economic diversification is inextricably interwoven with the restructuring of governance, which means massive devolution of powers from the over-loaded central government to the sub-national governments.

No wonder why the retinue of commendations from right thinking individuals to the Southern Governor, who, in their Asaba Declaration some days ago, hit the hammer on the nail vis-à-vis restructuring.

No doubt, the present flawed structure has made the country the poverty capital of the world. Since the world is now a global village, foreign investors are sufficiently aware that there is virtually absence of conducive and enabling environment for high net-worth investments due to pervasive and seemingly intractable insecurity in the country.

In other words, they are not impressed with the politics being played with the security of lives and property. Consequently, the clarion call for massive devolution of powers with the attendant decentralization of security architecture has become a desirable and imperative.

There is no gainsaying the fact that serious-minded local or foreign investors will not afford to invest their hard-earned money in such a clime with faulty governance structure. They might conclude that their investments would be vulnerable to the uncertainties of central and sub-national governments’ laws and regulatory agencies working at cross purposes.

It is necessary to recognize the fact that banks constitute a significant segment of the organized private sector, the most important financial intermediaries and catalysts and engine of socio-economic growth and development. However, a restructured Nigeria, with the six geopolitical zones as regional governments, will make maximum use of the banks to explore untapped potentials in agriculture for sustained and inclusive growth.

This is the over-riding benefits of the clarion calls for the restructuring of the federation to restore true fiscal federalism as it was in the first republic.

The envisaged new federal structure with the geopolitical zones as regional governments will leverage on areas of comparative advantage. For instance, the federal government, in synergy with the Central Bank of Nigeria, floated “Anchor Borrowers Programme”, which resulted in enhanced food production with the attendant value addition for wealth creation and massive jobs for the unemployed people in addition to enhanced Gross Domestic Product [GDP].

The recent blockage of farmers from conveying their produce down south should be seen as a wake-up call on massive irrigation facilities in the southern part of the country for food cultivation all year round, including animal husbandry.

State governments should borrow a leaf from the Agricultural Credit Support Scheme [ASCC] floated by the federal government; in synergy with the Central Bank of Nigeria, which has demonstrated competence in economic diversification, away from mono-cultural crude oil-driven development, to galvanize the people for the untapped potentials in agriculture.

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