From Isaac Anumihe, Abuja
Following a decline in revenue and foreign exchange earnings and increased debt service payments, a United Nations Development Programme (UNDP) report on Nigeria has declared that Nigeria’s economy is wobbling.
According to the report, which is expected to be launched Wednesday, August 10, the COVID-19 pandemic has been detrimental 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.
The report also noted that the decline in revenue meant an overdependence on borrowing and increased debt service payments with more than half of the annual federal government revenues being used to service debts.
“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
“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.