By Ovie Okpare
Nigeria’s Vice President, Prof. Yemi Osinbajo on Friday gave reasons as to why millions of Nigerians were still living in extreme poverty in spite of the abundant natural resources in the country.
He blamed the poverty syndrome in the country on over dependence on crude oil, a situation, he said led to the neglect of other mineral resources in the country.
Osinbajo, however, noted that the President Muhammadu Buhari-led All Progressives Congress (APC) is putting economic measures in place to pull the nation out of the poverty valley which it finds itself.
The Vice President spoke on Friday in Asaba, Delta State capital, while declaring open the 18th meeting of the Joint Planning Board (JPB) and National Council on Development Planning (NCDP) with the theme: ‘State Fiscal Sustainability and Economic Diversification in Nigeria.’
According to him, the discovery of oil, which was suppose to be a added advantage to the natural endowment in the country was now hoodwinking its economy and impoverishing its citizens.
He stated that the nation must diversify its mono economic principle on over reliance on oil wealth which insisted was not only unsustainable but not capable of creating jobs and building enduring infrastructure that will support rapid economic growth.
Osinbajo told the guests at the event including Governor Ifeanyi Okowa, the Minister of State for State, Budget and National Planning, Clem Agba, and hundreds of delegates from states of the federation, including Commissioners of Finance and Economic Planning and their Permanent Secretaries, that Nigeria had over 112 million people in extreme poverty in 2012 when the price of oil was over $100 per barrel.
As such, Osibanjo advocated for a paradigm shift from the unsustainable oil wealth, and focus on the diversification of the nation’s resources by investing in agriculture and other sectors capable of transforming the economic landscape.
He stated that governments at all levels must adopt better ways of tax administration to avoid multiple levies on small scale entrepreneurs; take advantage of areas of economic strength; invest in economic clusters; among other economic steps to ensure rapid growth.
“The reason for the diversification of our resources is because oil at whatever price will not deliver jobs, it will not provide enough money to build infrastructure and answer the human development issues. No matter how much we earn from oil, we simply cannot begin to address the fundamental problems of our lives.
“Every state must determine where it has comparative advantage and focus on such areas. Secondly, there is a great need to boost agricultural production. If states choose two or three arable crops and specialize, such specialization will enable the economics of scale across the entire value chain from preparing land, storage facilities, transportation, marketing and sales. This also implies to the agro allied value chain,” he stated.
Furthermore, the vice president urged state governments to invest in economic clusters by providing supporting infrastructure which individual artisans cannot provide on their own.
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“States must take advantage of the entrepreneurial skills of Nigerians by empowering economic clusters through the provision of basic facilities and infrastructure.
“I have so far visited about 24 states as part of our MSME clinic plans taking the regulatory authorities such NAFDAC, SON, CAC to show them what the small businesses are doing and to enable the regulatory authorities to understand that these small businesses need their assistance.
“What I have seen across the states is that we have vibrant economic clusters everywhere from shoe making clusters to leather processing clusters to phone assembly and repair, steel fabrication and several agri businesses.
“What these require is some support from state and federal government in the provision of some infrastructure in existing clusters. Infrastructures the individuals cannot afford on their own to continue in business.
“It is also the plan of the federal government to provide broadband connectivity to assist the states but the states cannot charge fees for the laying of broadband infrastructure.
“If the state decide to charge each time broadband infrastructure, is laid, it is going to hinder the 2023 objective as it will be strangulating the goose even before it starts to lay the golden eggs.
“States should invest in agencies that can help small businesses with regulations to assess them. When the businesses grow, then they can tax them. The key thing is to think out of the box and to utilize the opportunities that are open to the states,” he added.
In his address, Governor Okowa noted that it is imperative for state chief executives to imbibe the culture of fiscal discipline, pointing out that without such, there could be no fiscal sustainability.
He stated that observation of fiscal rules was the first step to achieving fiscal sustainability, adding that annual budgets of States must be derived from the Fiscal Strategy Paper in line with Fiscal Responsibility Law.
“In Delta State, we have adhered strictly to this law and all Ministries, Departments and Agencies (MDAs) are required to align their projects and programmes with available resources in short, medium and long term.
“This will eliminate deficit and restore the health of our public finances.
“Most importantly, we have kept the size of the budget realistic and realisable while projects are embarked upon based on their economic and social value.”
