Exploring Non Oil Revenue
THE contributions of oil sector revenue to economic growth of a country especially developing countries like Nigeria are crucial. Hitherto, oil contributes over $231 billion in rents for the Nigerian economy and these rents have constituted between 21 percent and 48 percent of Gross Domestic Product. Nonetheless, the effects have not assisted in alleviating poverty and unemployment in the country. This is enough reason for government to diversify into non-oil sectors in order to complement the oil revenue. We advocate that if Nigeria aims to be the real “giant of Africa” as claimed, efforts must be made by the government to foster attention to the non-oil sector otherwise, the worse is yet to come.
NIGERIA’s over dependence on crude oil revenue has affected the economy negatively, thereby, reducing the productivity in the economy. No doubt that oil revenue has contributed substantially to revenue generation and growth of Nigeria’s economy. Nonetheless, revenue generation from oil has begun to drop as a result of general price fluctuation which calls for diversification into the non-oil sector before it gets out of hands. For this reason, non-oil sector is referred to as those groups of economic activities that are outside the petroleum and gas industry forms a crucial sector in Nigeria.
THE Hope can classify non-oil sector into construction sector, telecommunication services, financial sector, tourism, restaurants, parks, carnivals, movies, wholesale and retail, health services, export trade, agricultural activities, mineral activities, power (conventional and renewable), transportation services, manufacturing, environmental services, research and development activities, and information and communication technology (ICT) among others. Each of these activities consists of various businesses which engage a large chunk of the population. For instance, Tourism consists of hotels and restaurants, resorts/recreation parks, cultural activities, carnivals, movie industry, arts and crafts, comedy. When viewed from this background, the general assumption that the non-oil sector refers to agricultural and mineral activities alone is not true and makes the assessment of the sector narrow.
IN addition, one of the most effective and efficient means of internal revenue generation for government is through the tax system. In support of the benefits attributed to tax revenue, it is asserted that taxes constitute the key sources of finance to the federation account distributed among the three tiers of government. These non-oil sectors have the potential to provide food for human population, and act as source of raw materials for industries and thuspromote economic growth and poverty reduction. In the years between 2008 and 2014, non-oil revenue marginally increased from 45.09% to 48.01% (National Bureau of Statistics, 2014). This showed that if government devotes much effort to revenue generation from the non-oil sector, the flow of government revenue will be sustainable and appreciable overtime.
THE non-oil sectors have the potentials of providing employment opportunities for the teeming population and thereby contributing to the growth of the economy. Ambitious countries are moving into space technology, tourism, robotic information, and entertainment. Sadly, Nigeria is still languishing in poverty. We should learn from our immediate environment. The amount spent on research by other countries is huge; hence ,Nigeria should know that only those with economic power will sustain their freedom and independence. Government should explore the window of opportunity which Nigeria -Morocco discussion can offer in respect of the gas project as Nigeria is the second country with gas deposit in the world.
WE should not rely on one source of income, we should tap into as many as possible so as to meet the needs of its growing population. Our bitumen is also a huge potential. Before the 1970s, Nigeria depended on Agriculture but after the 70s, oil took over, hence other areas should be looked into. There is need to promote other sources of income including tourism. We need to work on our education system. The people should be trained on new ventures.
THERE is need to diversify into other areas of energy.Thus, government needs to further diversify into other sectors like environmental sector, ICT sector and financial sector of economy which have become imperative due to the dwindling oil revenue.
TO this end, the government should be motivated by the current crash of oil price all over the world which has the propensity to deteriorate a growing economy, thus, the need for government to tactically diversity into other sector (non-oil) of the economy which have been tested to produce significant result in literature.
THE importance of these sub-sectors is germane at a time like this when the world is battling with various challenges. Investment into environmental, ICT and financial sectors cannot but be well appreciated as a naira devoted or contributed into the sector today will certainly serve as a saving ground for the economy sooner than later, thereby enhancing economic growth to a productivity state where it can compete with other developing countries of the world.