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Published On: Fri, Mar 13th, 2020

Coronavirus: Time for full economic diversification – Buhari

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  • ..says oil price fall will affect infrastructure funding
  • …private sector to mobilize N1.2trn for power, roads

By Egena Sunday Ode, Abuja

President Muhammadu Buhari has said the outbreak of coronavirus and its attendant economic consequences had imposed on the country, a compelling need to intensify its economic diversification agenda.
Code named COVID -19, Coronavirus had brought about a sharp decline in crude oil prices thereby elevating the country’s economic risks, the President noted in an address at a dinner with panelists of the Central Bank of Nigeria ‘Going for Growth’ Roundtable Session, at the State House, Abuja, Wednesday night.
Accordingly, he said an avenue had come for the country to intensify its economic diversification, invest more in agriculture as well as push for self-sufficiency in food production.
The President said pointblank that given government’s dependence on crude oil revenues for close to 60 percent of its revenues, the current decline in oil prices would affect government’s ability to meet the infrastructure and human capital needs.
However, the private sector has pledged to work with the Federal Government, and key development finance agencies, to mobilize close to N1.2 trillion from banks, pension funds and other financial institutions, to fund road, power, and port infrastructure.
They have already identified six key road projects and three seaport projects for funding, adding that the special purpose vehicle implementation will commence in October 2020.
President Buhari pointed out that those external challenges brought about by the ravaging strange disease had only served to reinforce the need to ensure that Nigeria is self-sufficient in the production of strategic goods.
He said: “A key focus of this administration has been diversification of the Nigerian economy and improving Nigeria’s level of self-sufficiency in food production. These measures would help support faster economic growth, create employment opportunities for our teeming youths, and reduce our import bill.
“The onset of the corona virus in December 2019, which has spread to over 100 countries is having a significant impact on global growth, as well as commodity prices such as crude oil, which has dropped by over 45 percent since January 2020.
President Buhari expressed delight that his administration has made some progress in the diversification plans and in creating an enabling environment for the Nigerian private sector to thrive.
He continued: “In the agricultural and manufacturing sectors, we have seen substantial improvements in the cultivation and processing of key staple commodities such as rice, maize, cotton and tomatoes.
“Apart from the successes we have recorded, I admit that challenges do remain. Given our dependence on crude oil revenues for close to 60 percent of government revenues, the recent decline in crude oil prices affects our ability to meet the infrastructure and human capital needs.
The president assured that his administration would pay close attention to the recommendations made by the participants at the roundtable.
“I therefore welcome continued collaboration with the private sector. The recommendations provided today on ways in which the private sector can support growth in key sectors such as Agriculture, Manufacturing, ICT, and Finance are necessary if we are to achieve double digit growth of our economy,” he said.
Central Bank of Nigeria (CBN), Godwin Emiefele said the private sector had committed that given a conducive environment, ideas generated at the round table would be implemented and through the CBN, periodic updates would be provided to the Presidenti.
Emefiele presented some of the key findings from the Roundtable session:
“Participants stressed the need for greater collaboration between the public and private sector in addressing some of the emerging challenges to growth. One key highlight was the need to ensure that the Nigerian economy is self-sufficient in the production of key goods and services, as this would strengthen our buffers and insulate our economy from external headwinds.
“Participants from the financial sector agreed to create a special purpose vehicle working with the Federal Government, and key development finance agencies. The well-structured SPV, will be used to mobilize close to N1.2 trillion in funds from banks, pension funds and other financial institutions, to fund road, power, and port infrastructure. Six key road projects and 3 seaport projects would be identified for funding.
“The framework for this SPV is currently being worked on and will be ready for implementation by October 2020. When implemented the SPV will help to reduce the burden of government financing of infrastructure projects and enable the government to focus on funding other priority areas. It will also reduce the cost of transporting goods across the country for farmers, SMES and Manufacturers. More importantly it will help improve our ability to attain double digit growth rates.

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