The Lagos Chamber of Commerce and Industry (LCCI) has faulted Nigerian economy’s over dependence on crude oil 54 years after it gained independence from Britain and 14 years under the current democratic rule.
The LCCI in a statement to mark this year’s independence anniversary celebration noted that over the last 54 years the Nigerian economy had transformed from a basically agrarian economy to an economy driven largely by resources from the oil and gas sector.
According to LCCI, economic growth trend, measured by the performance of the Gross Domestic Product (GDP), has been generally positive over the last two decades, averaging about six percent.
“This is good compared to growth conditions in most economies around the world. However, it remains a major worry that the economy is still structurally defective as it is too dependent on the oil and gas sector, creating serious vulnerability risks. “Today, the biggest shortcoming of the economy is its dependence on oil. It makes the economy very vulnerable to global shocks and weak in inclusiveness,” said the LCCI statement.
“The lack of political will to reform the oil and gas sector remains a major shortcoming of governance over the past two decades,” lamented LCCI.
It went further to express concerns about the weak impact of the growth performance on private sector productivity and the welfare of the Nigerian people.
“The quality of the business environment remains a source of concern to investors, especially in the real sector. Weak infrastructure and institutions had adverse effects on efficiency, productivity and competitiveness of enterprises in the economy. These conditions pose a major risk to inclusiveness and job creation in the economy,” it added.
Following the recent GDP rebasing, the Nigerian economy is now the 26th largest economy globally and the biggest in Africa with a GDP of $510 billion in 2013. It is also one of the largest consumer markets globally, although the country currently ranks 153 out of 186 countries in the Human Development Index by the UNDP and 147 in the Ease of Doing Business Ranking of the World Bank out of 189 countri es. This flaw, the LCCI noted, “underscores the lack of alignment between economic growth, investment climate and the welfare of citizens in Nigeria.”
According to LCCI, the Nigerian business environment was generally challenging for manufacturing enterprises because of the quality of infrastructure, which is why the risk of industrial investment is high and continues to increase. Said the LCCI: “The various policy interventions have not had the desired impact on the sector. Unless there is an effective and sustained protection and support for the sector, and a dramatic improvement in infrastructure, the outlook of the sector will remain gloomy, particularly for the small scale industries.”
It also lamented that in the last 15 years of democratic rule, core democratic values were yet to take firm root in the country, especially in areas of accountability by the political leadership at all levels; transparency in the management of public finance; rule of law; and separation of powers and the inherent checks and balances.
Source : SunOnline