The call by Vice President Yemi Osinbajo on African countries to prioritise diversifying their respective economies away from oil is a right one. For too long, the majority of the countries in Africa have built their economies mostly on mono-products leaving their people to suffer untold consequences of economic stagnation and hardship.
The unfortunate situation has gone on for too long, leaving analysts to wonder if the continent was under a spell. Take any one country, and the depressing situation with their economies is almost the same. For a number of others, despite the abundant natural and agricultural resources, they hardly banked on any noticeable product or service at all, apart from the handouts from international donor agencies and foreign countries.
Nigeria, the most populated country on the continent, best mirrors the pathetic situation with its economy. Blessed with abundant and human resources, it has not maximised the benefits of its God-given resources. Once oil was discovered just before it gained independence in 1960, it quickly abandoned agriculture, the trajectory that had served it well and concentrated on oil revenue. It exported every ounce of crude it could mine and forgot about adding value to the product or using the proceeds to develop other sectors of the economy.
This went on for some time, until recently when the harsh economic realities and the volatilities in the oil market taught the country some lessons. Even now, there is still a lot to be done in our effort to diversify the economy.
Most African countries, are blessed with abundant agricultural and mineral resources. Kenya, for example, recently announced a return of 1.8bn USD from the export of rice alone in the last one year. The East African country is well endowed in a number of other agricultural products, and with its well-known tourism resources, it could earn more in foreign exchange. Gambia and Ethiopia are two countries which are currently leveraging on their tourism and aviation potentials.
Until recently, Nigeria has paid lip service to its economic diversification efforts. With basic infrastructure and transparency and accountability mostly lacking in government processes, there was very little that could be done. Now that the narrative is changing. Power which is critical for any meaningful diversification efforts is still at an abysmal 7,000MW generation capacity with only half of that figure transmitted. This is a far cry from the 40,000MW capacity that the country needs to reach its optimal power needs.
The difficulty in the mining sector is signposted by the controversies that have dogged the Ajaokuta steel company since it was first conceived in 1982. Recent National Assembly interrogations revealed that perhaps, 98 per cent of the job, costing the country over 8bn USD has been done, but how to deliver the remaining two per cent which has been estimated at about 1.2bn USD remains problematic.
There is no doubt that fixing Ajaokuta and optimally harnessing our steel and other mineral resources hold the key to our industrialisation. And if our agricultural resources are fully tapped, Nigeria would earn much from that sector. This is the kind of challenge that Nigeria and other African countries must face to diversify their economies. African countries should heed Osinbajo’s advice.