How is Nigeria faring in the face of the dwindling oil prices?
There has been some attempts to make people feel that there is no hope; that this situation is so difficult, and that there is hopelessness in the land.
But, I had said from the beginning when oil prices began to fall by 50% that this will be a tough year, but there is hope. There is light at the end of the tunnel.
The reason is because we have worked so hard as a country to lay the basics for the country to exit this situation and get back on a good path. And that is what gives me hope.
Why do I say that? First of all, let’s come back to the fact. We now have a Nigeria, which is the largest economy on the continent.
We have to keep stressing it, because it means we’ve got the sectors. We’ve got the base, which will enable us to carry out that diversification and be able to have a stronger economy in the long term; that create the jobs and gives our young people hope.
So, it is very important to note that. We didn’t know that before. When you look at the structure of the economy, and you see that all the analyses show that the growths from the economy have come from the non-oil sector; that Agriculture has been doing well, we have produced more food than ever before – 21million metric tons more food.
We have produced paddy rice, 1.1million metric tons a couple of years ago to 1.6million metric tons now.
In fact, what I am saying about rice is that it is dry season farming, not to talk of paddy. And we are on our way to really reducing our dependency on food imports.
Because we’ve got food, prices have been kept relatively stable and reasonable, unlike other oil producing countries. That is helping us manage the situation for the average Nigerian.
Measures to strengthen Nigeria’s reserves
This is of concern to Nigerians. Manufacturers looking for more foreign exchange, others paying their school fees and tuition abroad and even ordinary people.
But, I also feel that with this strong base that we have, if we just keep steady, we will be able to exit, and the value of the Naira will strengthen, because we have got the different sectors.
And there are two ways we have to do it, and I think this is what Nigerians want.
Instead of depending on oil, we have to look at the two ways to strengthen our reserves, because that is the way we can strengthen the value of our currency.
There are two ways: one is to reduce demand for imports and that is why I think our demand for agriculture imports is very important for us to watch that. And then reduce our demand for foreign goods.
I have always encouraged Nigerians that even strengthening the value of the Naira is not just government actions alone. It is in our hands. If we buy more of what is made here in our own country and reduce the demand of things made outside, that means we can increase our reserves and the Central Bank does not have to continue giving money to import all those goods that we don’t need.
The second way is for us to start exporting things other than oil. And that is where again I feel encouraged because we are laying the foundation for that.
Recall that in the 60s, we were exporting groundnuts, cocoa, cotton, rubber and many agricultural products and suddenly we didn’t keep up. We have the ability to go back to those, but not just exporting the raw materials and we already have people in these sectors adding value. What we need to do is to expand growing the cocoa, processing it here for our own internal demand and export it. And then we earn foreign exchange.
There is an area, which is unexploited where we can earn foreign exchange which we are not. When I go around the continent, every single African woman wants Nigerian clothes.
This may sound strange to lots of people. Those of us here, don’t we import shirts, trousers, from the UK? But, people are here (in Africa) demanding our own clothes. Yet, we are not able to get together as an industry – the fashion sector – to make clothes we can export.
We will be sitting here and other West African nations will come and exploit it. But, there is an opening. I am happy that the Minister of Industry, Trade and Investment is organising and working with the textile industry and the fashion industry to export, because we can earn so much from that. Imagine dressing the whole of Africa and what we can earn from it.
So, those are the two ways. If we now earn foreign exchange and we conserve by using our products, we will be able to add more to our reserve which will underpin the value of our currency.
Are current economic policies sustainable?
No matter what government there is, there will be a set of policies, institutions that will support this country. And that is what I admire about Mr. President when he talks.
He talks about how we can put in place something that will last; whether I am here or not here is not the issue. It is about laying in place the building blocks for the Nigerian economy.
What is the impact of the government policies on the economy on the “common man?”
As I said, meeting our salary bill is very important to us and our pensions.
The second thing is making sure that the health benefits we have gathered in this economy, we don’t lose it. Children must be immunised. We can’t let down immunization, because we know what that means. Polio vaccination: we are almost close to eradicating polio.
This administration has been working towards that. We have eradicated guinea worms and we must make sure that all those medicines and vaccinations are kept.
HIV and AIDS, there are treatments and all that. And then, there are very important infrastructures we focus on doing that.
The president promised to build the second Niger Bridge. That work is ongoing.
The Lagos-Ibadan road is very important. The rail – completing some of the rail and make sure that they are running. These are ways the average Nigerian can feel the impact of what these governments is doing. I think it means a lot. I encountered some young Nigerians we don’t know what it means to be in a train because the train had never worked in this country. And now they can ride on a train. Very soon now, this Abuja-Kaduna line will be open.
Lagos-Kano line has been operating. Even the line to Makurdi and so on. These are things that impacts and the roads system that have been upgraded constructed in this economy.
Yes, there are so many more. But, we are on the good path, we should applaud it. When your journey on Benin-Ore road has been made smooth and short, isn’t that impacts?
When you go to some of our rural areas, and you have access to water because boreholes were dug by the millennium development goals programmes and they have solar lightings that is impact.
And these are some of the things that we have started in this administration that are impacting lives.
Through all the efforts and support of the private sectors, we have created 1.4million out of the 1.8 million jobs that we need each year. That is impacting.
Yes, the 400,000 people who have not yet gotten jobs that year will feel it and you will feel it if they are your relatives, son or daughters still sitting at home.
We are not saying that we have met the mark. But, we have gone a long way and steadily we have made solid plans on that path.
The President has said that he will do two million jobs per year because we are so close to the 1.8 million and we’ve got the specific sectors generating these jobs.
Not just the special programmes we are doing. Sectorial investments are very critical. And that is what we are focusing on. And I have not mentioned the housing sectors impacts on the average Nigerian.
When you start something, it takes time to grow. We started these housing thing now, and yesterday we have a meeting with the CEOs of the primary mortgage institutions to do a review.
Government Role in Institutionalising Access to Finance
For small and medium sized businesses in this country, which employ the most people (about 66% of the adult population) contributes 45% of our national income.
We have opened up several avenues to support them not on ad hoc basis but apart from what the Central Bank has done, the President kicked off two days ago a new development bank.
For the first time, when this bank start working by the end of this year SMEs will have access to finance and they can borrow for five years, seven and ten years.
We have never had this before in Nigeria. They will have one and half years of grace meaning that when they borrow they won’t worry about paying back for a year and half and that will give them time to organise themselves.