Financial analysts and economists in various journals and business sites have become broken records. The tough time we are in is a product of relying too much on oil. A commodity that is perhaps the most susceptible to speculations, geo-political tensions and cyclical risks.
What if we want to do business with the mindset that oil is no longer there? What if Nigerian businesses and the private sector community want to plan and conduct their affairs without looking at markets’ forecast of crude price? What if advertisers have come off the ‘oil price hangover’ and they want to market their brands and services in a new direction?
It might sound ludicrous that any strategic manager will take such paradigm shift. The reality however suggests, this is the most sensible and expedient decision we all have to make. While the road will be rough, the end of the tunnel is a city of light with manageable risks for all.
To make this possible, two areas should be looked into.
Nigeria has to look inwards, by identifying our areas of competitive advantage. Agricultural and mineral commodities have over time become our plan B aside oil. But in the binge of oil, production of these commodities have declined, relegating Nigeria behind Ghana, Ivory Coast and Ethiopia. Nigerians must no go back to this basics. Adopting mechanization, technology and sound policies would reboot our commodity strength. Within a minimum period of three years, Nigeria’s exports would double the current rate. Nigeria can then shore up its Forex reserves to pay for other imports we cannot produce.
Another area that can make Nigeria exist without oil are business and trading services. Because these aspects of the economy are skills and technology driven, everyone has then concluded that ‘it is currently practically impracticable’ for companies and businesses to do without imported services software, expertise and advisory services. This is the fallacy we have taken as gospel in doing business in Nigeria.
The root cause of this problem has been attributed to an educational system that has no correlation with real world. Because businesses want results within a short period of time, everyone resort to importing software engineers, architects, developers and systems experts. These services are paid for in USD. Did I hear anyone complaining about the lack of Forex? For example, why are Nigerian banks using foreign software? Banks pay millions of USD annually to Indian and European firms for banking solutions. If these software are developed and provided by Nigerians, the rest would be history.
To get the Nigerian economy work without fixation on oil, critical reforms must be made, it should start with the most simple things.
Featured image: thehindubusinessline.com
First published in NextGen, a newsletter of SBI Media