COVID 19: NESG urges FG to diversify economy from over-reliance on crude oil


The Nigerian Economic Summit Group (NESG) on Tuesday called on Federal Government to diversify the economy in order to increase its non-oil revenue and make the country less import dependent.

The Chief Executive Officer of NESG, Mr Laoye Jaiyeola, made the call at an advocacy dialogue on Webinar organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.

It was reported that the Advocacy Dialogue, Series 1.0, had as its theme: COVID-19: “Tough Choices for Banking and other Businesses.”

“Nigeria has been hit by twin shocks – the COVID-19 pandemic and declining oil prices.

“In order for us to mitigate the negative impact of the twin shocks, we need to as a country maintain delicate balance between saving the lives of our people and growing the economy.

“These twin shocks are not necessarily mutually exclusive and both can be pursued simultaneously.

“We need to also diversify the economy from over reliance on crude oil as a source of revenue and focus more on the real sectors such as agriculture, manufacturing and SMEs.

“At the sub-national level, the state governments need to look more inward to significantly increase their Internally Generated Revenues.

“Of course, there is a need to consistently improve on the level of infrastructure in the country to make these things happen,” he said.

The NESG boss also urged banks to maintain more diversified portfolio to avert concentration risk and spike in nonperforming loans.

He urged the sector to strengthen control environment to check against anticipated increase in frauds and operational losses.

Jaiyeola urged other businesses to rethink their strategies and models, saying they would also have tough choices to make going forward.

He advised them to ensure proper cashflow management, as cash remained king while synergising and collaborating with other players within their industry.

For consumers, the NESG boss advised that they reconsider their consumption pattern and build savings culture as precautionary measure.

He, therefore, urged the Central Bank of Nigeria (CBN) and Bank of Industry (BoI), among other institutions, to jumpstart activities in the real sector, particularly among the SMEs.

According to him, these institutions have significant roles to play in reflating the economy. He said: “The current position in the country is cyclical and will not be permanent.

“Despite the crisis, there are some opportunities. For example, we still have certain industries thriving in the country, such as information technology, communications, power, etc. “Our core challenge as a country is to progressively diversify the economy, grow the real sector and create a conducive environment for business.

“By doing this, we will not be only able to stimulate significant investment from local players, but will also be able to attract more of foreign direct investments with a view to ultimately moving Nigeria from a “vicious cycle of poverty” to a “cycle of boom and prosperity”.