OKE GODWIN OLAOLUWA is an Economist and a Financial Analyst based in Ikorodu.
He is one of the brightest mind in the economic sector and was hosted by the Ikorodu Division Youth Initiative Movement (IDYIM) on Sunday The 12th of July 2020.
Here are the Excerpts from the Educative Session.
NIGERIA AHEAD OF TOMORROW, REPOSITIONING FOR ECONOMIC GROWTH AND DEVELOPMENT By OKE GODWIN OLAOLUWA.
Economic growth is measured by Gross Domestic product (GDP Growth Meaning growth in value of market output).
While Development is measured by the human development indices like living standard, quality of health and quality of education, life expectancy rate.
In Nigeria, the GDP growth is measured by values of production or output in over 40 sectors. I.e agriculture sector, oil and gas, electricity, transport sector, telecommunications, trading sectors E.t.c.
For example in the first quarter of 2020 (January to April) the value of the agricultural sector is around 28 trillion naira, oil and gas around 11 trillion Naira.
IDYIM: Going by the present situation of our country at the turbulent period of pandemic covid 19, What is your observations about the economy?
Mr OLAOLUWA: I talk from the point of verifiable statistics. The Nigerian bureau of statistics already posted that, post Covid 19, if oil price trades at an average of $30 oil price for the rest of the year, the nation will slide into a recession of between negative 4% to negative 8%.
In simple terms there will be nothing like economic growth but depression
Depending on the period of economic lockdown.
IDYIM: Many people here will find it hard understand that the Agric sector contributes to economic growth more than oil and gas when the nation actually gets over 70% of revenue from oil. Can you break this down?
Mr. OLAOLUWA: Yes! Agriculture is still been produced at subsistence level, majority of our agric production are consumed locally while a few percentage of production is exported.
You can only earn revenue when you export. Also agricultural produce are tax exempt in our country, so government earns no revenue from agric produce locally.
IDYIM: Given COVID-19 impact on crude oil exploration and export and the contribution of Agric to economic growth in Nigeria, can we conclude that the future of Nigeria’s growth and development is in Agric?
Mr OLAOLUWA: Nigeria have a comparative advantage in agricultural production. We have probably one of the largest uncultivated lands in the world. Africa average is about 40% unutilized lands.
Before the advent of oil, the economy of the country was run purely on agric export. Cocoa in the south west, oil palm in the south east and groundnut in the north.
IDYIM: What is the country growth rate presently and how can we improve the down spiraling micro economic condition of households in present day Nigeria, specifically in this COVID-19 era?
Mr OLAOLUWA: In real term, we are not growing if we are to consider our population growth. However the only way the micro sector can be supported, is by inculcating the informal sector in the economy of the country. Government supports and others.
IDYIM: How will you rate the participation of young entrepreneur in Agriculture and their contribution to food security in Ikorodu division? Do we have a tomorrow in them?
Mr. OLAOLUWA: I do not have the statistics on the number of young entrepreneurs in agriculture within the division. But many of this issue were discuss in the last economic summit.
A major point was that the division to take advantage of the farm settlements scattered within the division and ensure they are utilised optimally.
IDYIM: Going by this downward trend of our economy.
What and how does the youths in ikorodu stand to benefit? if they are ready to solve our enormous economic challenges through the agricultural sector?
Mr. OLAOLUWA: The federal government launched its economic sustainability plan about two weeks ago.
The government plans to inject as much as 2.3 trillion naira into the economy. The major concern in the document is how to engage the youths in agriculture and other government projects.
I’ll encourage the youths to keep tab of events as they unfold in the coming days and see how they can tap into the opportunities to be provided.
IDYIM: Do you think the youths in ikorodu and by extension, Nigeria are ready to venture into the agricultural sector? Considering the level of corruption within our country.
Mr. OLAOLUWA: Through government supports and encouragement, I think the youths will be interested once they realise the sector is lucrative. The future is Agriculture.
IDYIM: That’s a Keynesian approach, I supposed. How prepared are we, as a nation, for the inflation issues that may follow the injection of the 2.3 trillion naira into the economy?
Mr. OLAOLUWA: Considering our size and in comparison to other countries, The amount is inadequate but it is a good start.
However, the injection of the sum into the Economy is a two leg approach. One to improve supply (To production) and the other to boost demand. According to the documents, amount will be injected as loans to companies, some amount for payroll support programs. Also the government intend to fund it’s social investment programs so as to boost demand.
So since the some is shared between the supply and demand side, the risk of inflation should be minimal.
IDYIM: How truly BIG are we as a nation?
Mr. OLAOLUWA: The biggest in the continent and among the top 30 biggest countries in the world by GDP alone.
But as this translated to development. Your guess is as good as mine.
We are at the bottom rung in human development indices. One of the poorest in terms of per capita income.
IDYIM: Back home again, a lot of the land enmarked for Agriculture in Ikorodu division are being exempted and granted residential status approval by the same government that enmarked them for Agric in the first instance. How serious is our GREEN plan in Lagos State?
Mr. OLAOLUWA: Lagos state is about the smallest state in the country by land size. Considering the massive urbanisation the state have witnessed in the past years and the demand for housing, such cannot be far fetched.
However, I think Lagos state have a comparative advantage in livestock farming than crop production. We can outsource a major part of the crop production aspect by investing in other states, while we concentrate in livestock farming.
IDYIM: Do you think the LGs have enough fiscal powers to significantly contribute to the Agric sector?
Mr. OLAOLUWA: No I don’t.
If we have to move from subsistence to mechanised farming, it involves a huge investment. It should be the function of the state and the federal government to create the enabling environment to attract investors.
IDYIM: Can the present structure (governance, administration, orientation etc) of the Nigerian economy guarantee the tomorrow we dream of? How can we make a difference regardless of government intervention and support? What about the large corporates (Banks & co), don’t they have a role to play? Are there trust issues? Will you support that young Ikorodu entrepreneur if he has a good proposal for Agric?
Mr. OLAOLUWA: Obviously the current cost of governance is unsustainable. Government after Government in this country have claimed to want to prune government expenses but all we get is increased recurrent expenditure. Sometimes we borrow to cover some of this expenses.
Which is bad!
Hence there is an urgent need to restructure our current structure.
The banks have a role to play, but we should understand they are also into business.
Except a drastic measures is on our current structure and our macroeconomic fundamentals, we will keep experience a high interest rate environment.
Obviously there is discontent and mistrust between citizens and government.
I have been an advocate for accountability and transparency in government. Until government opens its book to the public, The mistrust will continue unabated.