AfDB: Nigeria needs urgent economic diversification for COVID-19 recovery

The African Development Bank (AfDB) says economic diversification is the only viable option for Nigeria to survive the current global economic downturn occasioned by the COVID-19 pandemic.

NAN reports that Oyebanji Oyelaran-Oyeyinka, senior special adviser on industrialisation to the president of the AfDB, said this while delivering the Founder’s Day Lecture of the Igbinedion University, on Monday in Edo state.

He said the country cannot progress and respond favourably to the emerging challenges of the 21st century unless it hastily industrialises its economy from the current overdependence on exportation of crude oil.

“In pursuit of long-term recovery and sustainable development, Nigeria needs urgent economic diversification,” Oyelaran-Oyeyinka said.

“Nothing is more poignantly demonstrative of the danger of over-reliance on a single or narrow range of commodities than the recent crash in oil price we saw in 2020 due to the COVID-19.

“Economic diversification entails a shift away from a single income source (oil and minerals) toward multiple income sources from an increasing spectrum of sectors, products and markets.”

He noted that South Korean economy, which was on the same pedestrian with the Nigerian in 1960s in spite of being non-resource based, had performed incredibly strong through export diversification whereas Nigeria hardly diversified.

“Nigeria got locked-in into petroleum export for export earnings to the detriment of value-added agriculture and manufactures,” he said.

“The result is low contribution of the manufacturing sub-sector which fluctuates between 5% to 8% to aggregate output in Nigeria compared with its peers in Asia (Korea about 39 per cent in the 1990s) is staggering.”

Oyelaran-Oyeyinka emphasised the need for the country to invest in infrastructure which is a necessity for economic diversity.