Alhaji Atiku Abubakar, former Vice president, yesterday in Lagos, lamented the collapse of the nation’s economy following government’s excessive reliance on oil revenues. As a guest speaker at the investiture of the President of the Chartered Institute of Stockbrokers (CIS), Mr. Oluwaseyi Emmanuel Abe, Atiku said, “ the biggest problem Nigerians have is their addiction to oil revenues; the belief that we are doomed unless oil flows and oil money fills the Federation Account for our tiers of government to share.
“I will go straight to the point: our economy is broken, and if we wait for the oil price to rebound or for crude exports to bounce back or for oil receipts to recover, we may wait for very long and may not be able to fix it.
I say this because our constant complaints about the oil price, pipeline vandals and lack of funds tend to divert and distract us from the real challenges we are facing. To me, our economy is broken because our economic model doesn’t work, and to fix it we need the resolve to restructure our government finances so that we politicians have a real incentive to create a more conducive business environment.”
He said he was worried by the negetive belief that the Federal Government alone is the only force, the know-all, be all, and do all that would direct and bankroll the diversification of Nigeria’s economy.
“And we have convinced ourselves, again wrongly, that the only reason that the Federal Government is unable to spend money to do all we expect it to do is that the money has been stolen. We must erase that mindset in order for us to begin to climb out of our current depths.”
Atiku agreed that , the government can use oil receipts to improve the lives and livelihoods of the people he pointed out oil money is not a requirement for diversifying the economy. The former vice president, said “we need Federal Government officials who are willing to step back and carefully work out how they can empower the private sector to grow the economy and create jobs. And above all else, we need to understand that our most valuable resource is not our oil; it is our people. All of our people.”
Continuing he, stated that investors have noticed the nation’s predicament. “Foreign investment has nearly dried up. In the first half of 2016 the total amount of capital brought into Nigeria was less than $1.4 billion compared to $5.3 billion in the first half of 2015. Direct investment has fallen by half, portfolio investment is down by 87per cent and our capital and financial accounts are deep in the red. A number of long established foreign businesses announced they were planning to leave and many of those that decided to stay are cutting costs and trimming their payrolls to balance their books. Some respected Nigerian companies are folding up as well.”
He had earlier advocated for the restructuring of the Nigerian state, he advised that rather than praying for higher oil revenues, Nigerians should seize the current opportunity to get over their addiction to oil revenues, stressing that discovering new oil wells in the north or south was no substitute.
Government he said should look for sustainable sources of revenue, mainly taxes, duties and other levies, by enlarging the tax base and encouraging diverse economic activities right across the country and investing in human capital development to produce the entrepreneurs, inventors and workers of the future.
In the same second quarter of 2016 the Federal Government’s interest payments already exceeded its Federation Account allocations, and debt servicing absorbed almost 60% of retained revenue. In fact, 57 out of every 100 naira the federal government received went straight to its creditors.
As you can see, that doesn’t give us a lot of room to maneuver. And it is the reason why government’s efforts to get us out of the current difficulties should proceed in a manner that targets infrastructure improvements, public education, public health and, above all, reforms that remove obstacles to our people unleashing their creative and productive energies to set up and run businesses and create jobs and wealth in the process.
Investors have noticed our predicament. Foreign investment has nearly dried up. In the first half of 2016 the total amount of capital brought into Nigeria was less than $1.4 billion compared to $5.3 billion in the first half of 2015. Direct investment has fallen by half, portfolio investment is down by 87% and our capital and financial accounts are deep in the red. A number of long established foreign businesses announced they were planning to leave and many of those that decided to stay are cutting costs and trimming their payrolls to balance their books. Some respected Nigerian companies are folding up as well.
Speaking at the occasion, the former Governor of Lagos, Ashiwaju Bola Tinubu said “ Today Nigeria is going through a very serious economic challenges. We are blessed with human and materiel resources. The most important component of this resources is human resources that is why change begins with us”.