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The Urgency of Nigeria’s Economic Diversification

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In 2012, Nigeria became the second African country to be listed on JP Morgan’s emerging market bond index, and quickly became the biggest economy in Africa after surpassing South Africa with a GDP of $509.9 billion in 2013. Establishing itself as the second fastest growing key emerging economy after China in 2014 , with crude oil at all time high of $107.64 a barrel, words get out, economists and investors across the world renewed their interests in the Nigerian economy, a nation of over 170 million people and growth rate of 7.4 percent.

However, all these were short lived as global oil prices plunges, with Nigeria generating 53 percent of her revenue from crude oil and 93 percent of her foreign revenue. The economy dip, Naira, Nigerian currency had to be devalued three times as Nigerian foreign reserve can no longer sustain fix rate of 155 naira to a US dollar, exhibiting characteristics of first phase of economic recession, it became conspicuous that the nation that was once global destination for investments needs a more sustainable economic policy with a long-term strategy.

Diversification

The ongoing discussion between the US and Iran has further proven that Nigeria can no longer exist as a mono-crude oil economy but as a multi-diversified economy. The research conducted by Bloomberg shows that global oil supply would increase in 2016, when Iran’s oil is expected to hits global market and forces oil prices below current level, in fact, analysts forecasted $20 a barrel for crude oil in 2016. If the Nigerian economy is struggling this much at $45 a barrel the state of the economy is better imagine when crude oil price hit $20 a barrel.

The data released by National Bureau of Statistics (NBS) shows that Agricultural sector employed 70 percent of the Nigerian labour market, which comprises mainly the youth. The service industry is currently the fastest growing sector with manufacturing as the frontier, if Nigeria as a nation would overcome her current economic rout there is need for urgent economic diversification across all sectors.

The research conducted by Maria Uzonwanne of the Department of Economics, Nnamdi Azikiwe University shows that “there exists a positive relationship between economic growth in Nigeria and diversification of other sectors because, when there were proper management of human resources, huge investment and concentration on agriculture, Nigerian economy was recorded to be healthy and vibrant”, which means effective diversification strategy with proper management of manpower and government investment will not merely resuscitate Nigerian economy but also enables Nigeria to feed her growing population and subsequently eradicate poverty and create jobs.

Nigeria’s unemployed graduates is expected to increase by 24.33 percent in 2020, which means there would be more unemployed graduates by 2020 if nothing is done now, British Council.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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Economy

Scarcity of Day-Old-Chicks Cripple Poultry Farmers in Akwa Ibom

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Despite billions of Naira spent on Akwa Prime Hatchery and Poultry Limited by the Executive Governor of Akwa Ibom State, Udom Emmanuel, poultry farmers in the state said they had to order day-old-chicks from outside the state as the 200,000 capacity poultry farm developed specifically to make day-old-chicks and other poultry products available at affordable prices is almost empty at the moment.

The farmers expressed frustration over many challenges they face in the course of bringing day-old-chicks from outside the state. Usually, Ibadan, Enugu and sometimes as far as Kaduna, while the hatchery built and inaugurated in 2016 remains idle.

Mr Ekot Akpan, one of the poultry farmers who spoke with the pressmen said the state had not had it this bad.

Akpan said: “For the 12 years that I have been in poultry farming, this is the first time that poultry farmers have been so harshly affected by both economic and non-economic factors. And, quite unfortunately, nobody is available to offer any explanation.

“Farmers have been left at the whims and caprice of owners of the means of production.

“There seems to be no government regulation of the poultry industry. How, do you explain a situation where you wake up suddenly and the price of a day old chick is selling for N600, a bag of feed goes as high as N6,000.

“And, in a state that government claims to be pursuing agriculture as one of his cardinal programmes.

“For instance, in 2016, the state government said it has constructed an hatchery, and the intention according the government was to ensure availability of day old chicks at affordable price to farmers, but, quite, unfortunately, that effort has not yielded any tangible result.

“Farmers are still getting their day old chicks from Ibadan, Kaduna, and Enugu. So, the question now is where is the hatchery?

“One would have expected that farmers would be buying old chicks at humane prices, but, from all indications they acclaimed hatchery is a ruse. So, which one is the Akwa Prime Hatchery producing,” he said.

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