In the aftermath of a sharp decline in revenue and foreign exchange earnings in the country coupled with increased debt service payments, a United Nations Development Programme (UNDP) report on Nigeria has declared that Nigeria’s economy is presently wobbling and on life support.
According to the report that Africa Daily News New York obtained, on Monday which is expected to be made public on Wednesday, August 10, the COVID-19 pandemic has dealt a big blow to the economy coupled with a decline in revenue and foreign exchange earnings. This is because of the fall in oil prices and the reduced demand for oil.
According to the paper, the federal government currently spends more than half of its annual revenue on debt servicing, which results in an overreliance on borrowing and higher debt payments.
‘Beyond the short-term challenges for the oil sector, principal forex earner for Nigeria are the longer-term concerns as the world makes determined moves to reduce the consumption of fossil fuels.’
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‘Unemployment, underemployment and their effects on poverty have remained a bane for Nigeria. If no urgent measures are deployed soon, Nigeria with its teeming population is certain to fall into desperate times. Already, World Bank projects that about 5 million Nigerians will fall below the poverty line,’ UNDP said.
The report regretted that the manufacturing sector which could have provided succour is also battling challenges such as poor power supply, multiple taxation and inadequate infrastructure.
‘This does not mean progress has not been made in the sector as measures such as faster business registration time, improved imports and exports systems have been introduced. If more appropriate interventions are deployed, the manufacturing sector is sure to experience growth and be able to contribute more than the 12.82 per cent it contributed to the economy in 2020” the report noted, adding that if the agriculture sector can be more productive it can surpass the oil sector if the challenges of poor adoption of improved farming methods, inadequate infrastructure and insufficient credits are addressed.
‘Like other factors, Nigeria is faced with a serious infrastructure deficit. This cuts across housing, water, power, telecommunications and transportation network. All of these have contributed to slow economic growth. Nigeria’s growing population is another element to contend with,’ the report stressed.
