DR. WISDOM ENANG ENUNCIATES HOW NIGERIA'S NON-OIL SECTORS COULD BE HARNESSED TO STABILIZE THE NAIRA
SAMPSON ENYONGEKERE, UYO
A globally renowned oil and gas consultant, Engr. (Dr.) Wisdom Patrick Enang is of the opinion that diversifying away from oil, which has long defined Nigeria's economic structure would unarguably save the country's currency, the Naira.
The shrewd energy expert stated this on Friday, January 17, in an interview with newsmen in Uyo, the Akwa Ibom State capital.
He revealed that for decades; Nigeria's economic health has been heavily tied to oil exports which contributes over 90% of the country's foreign exchange earnings but 10% of the GDP.
Going history lane, Dr. Enang reminded that pre-independence Nigeria thrived on non-oil exports such as cocoa, groundnuts, and cotton, lamenting the shift away from these roots which has increased Nigeria’s reliance on oil, and exposed the nation’s economy to global market volatility.
“This imbalance leaves Nigeria vulnerable to global oil price fluctuations, and in recent times has contributed significantly to the sharp depreciation of the Naira which currently trades for N1560.13 to the US dollar, compared to N890 as of January 23, 2024. These economic strains make the Naira vulnerable to external market shocks.”
The Adjunct Professor of the North Dakota University (USA) further emphasized that the Naira's dramatic depreciation is driven by multiple factors including: the increasing demand for US dollars, floatation of the Naira, and the removal of fuel subsidies in mid-2023.
“This has triggered higher transportation and living costs across Nigeria, leading to inflation which has further weakened the Naira. Also, Nigeria’s over-reliance on oil for foreign exchange remains a major factor in its economic instability.”
“While Nigeria still grapples with the volatility of the oil market, several developing nations have managed to build strong diversified economies that thrive outside the oil sector.”
Expatiating further, the Akwa Ibom born, British trained Chartered Engineer cited Vietnam, Brazil, and Indonesia as important case studies of how investment in non-oil sectors can lead to economic stability.
“Vietnam generates over $50 billion USD annually from electronics exports, besides earning $4 billion USD yearly from rice exports, solidifying its position as the world's second largest rice exporter. Similarly, Brazil generates approximately $41 billion USD from soybean exports alone, making it the largest global exporter of soybeans. Indonesia also generates over $30 billion USD annually from its robust palm oil and rubber export sectors, positioning itself as a leading exporter of Agricultural commodities.”
Known for his massive campaigns and sustained advocacy for the adoption of a value-driven approach to leadership and governance, Dr. Wisdom Enang informed that Nigeria was not without its own assets which could help diversify the nation’s economy, as the country is the global leader in several agricultural products.
“By scaling up the export of high demand crops like cocoa, cashew nuts, and palm oil, Nigeria can reduce the pressure on the Naira and stimulate foreign exchange”, he suggested.
Speaking further, the Ethical and Attitudinal Reorientation Czar intimated that Nigeria being one of the global leading exporters of yam, sorghum, and palm oil can extend its dominance to other agricultural products.
“Contextually speaking, Nigeria is the second largest producer of sorghum, contributing around 10% to global production, and the largest producer of yam, accounting for more than 70% of global production. It also ranks among the top five global producers of palm oil.”
“By capitalizing on these strengths, Nigeria could replicate the success of Brazil with soybeans or Indonesia with palm oil. By processing and exporting more value-added products like cassava or palm oil-based goods, Nigeria could significantly boost the country’s foreign exchange earnings.”
While enunciating the imperatives required to boost Nigeria’s non-oil sectors, the renowned fellow of both the Nigerian Society of Engineers (FNSE) and the Nigerian Institution of Safety Engineers (FNISafetyE) adduced that enhancing infrastructure in tech and innovation will be vital for sustaining growth in such a rapidly developing sector. He also highlighted that the agricultural sector for example faces several challenges that must be overcome, including the lack of processing facilities, which limits the value of Nigeria’s agricultural products on the global market.
“Investment in improved storage and transportation systems can reduce post-harvest losses and boost export competitiveness. Similarly, improving port facilities and upgrading transport links will streamline export processes and enhance export efficiency.”
Speaking further, the erudite scholar harped on the role of regulatory agencies like NAFDAC and SON on the enforcement of higher product standards to ensure that Nigerian goods meet global quality expectations.
He equally highlighted that access to finance remains a challenge because high interest rates discourage investment and hinder the growth of small and medium-sized enterprises (SMEs) in non-oil sectors.
On the issue of funding, the multiple excellence award winner suggested the strengthening of institutions like NEXIM bank and the Bank of Industry to provide the necessary financial support to help SMEs scale and increase exports.
In a final analysis, Dr Enang submitted that investing in Nigeria’s non-oil sectors was not just a path to economic diversification, but also a solution to stabilize the Naira.
“By focusing on building infrastructure, improving the regulatory environment, and fostering innovation across agriculture, manufacturing and technology, Nigeria can reduce its dependence on oil and strengthen its economic foundations. Similarly, by reinvigorating the non-oil sectors, Nigeria has the potential to not only stabilize the Naira, but also build a more resilient and sustainable economy for the future.”
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