Lessons from COVID-19: Economy diversification is key, says Agbakoba

Lead partner of Olisa Agbakoba Legal, Dr. Olisa Agbakoba (SAN), a renowned maritime lawyer, has charged the Federal Government on the need and importance of diversification of the economy, than being totally dependent on crude oil proceeds.

On the strength of that, Agbakoba advised that Nigeria must now fully embrace mechanised agriculture, which is capable of massive job-creation and improvement of national security.

He said a take-off would be well-guided by the fact that the Central Bank of Nigeria has identified 10 crops to support, including rice, wheat, milk, tomato, fish, cotton and more.

“Economy diversification is one area government needs to urgently activate because of the massive budget deficit,” Agbakoba said, as he points to the danger of Nigeria’s mono –cultural economy where 85% of her revenue is derived from crude oil exports.

He noted that price shocks occasioned by Covid – 19, have caused crude oil receipts to go down and making it impossible to sustain the economy.

A strong keynote Agbakoba made was that the Covid -19 pandemic has caused fiscal deficit to grow from N2.17 trillion to N5.37 trillion, which he said must be financed by fresh borrowing.

Of course, while the revenue expectation as stated in the 2020 budget has been dashed by the global disruption caused by Covid-19, Nigeria is now running a deficit budget and borrowing massively, Agbakoba said.

“Unless we diversify the economy, we will continue to borrow to the point where it becomes unsustainable.

“Many governments have paid lip service to diversification, but this is the time to develop a very strong policy on diversification,” he added.

He advised that Nigeria should adopt the United Arab Emirates example, which diversified their economy and reduced dependence on receipts from 100 per cent to only 35 per cent by going into service and smart industries.