DEBT Management Office, DMO,
has described the current state of
Nigeria’s economy as near 100 per
cent idle capacity, but that it should
be seen as opportunity, as it implies
that the flexibility to grow the
economy is high.
The Director-General of DMO,
Dr. Abraham Nwankwo said that
“The difference between Nigerian
and other countries facing similar
economic challenges is that those
countries do not have the same
opportunities we have in Nigeria.”
He expressed optimism that the
naira and foreign exchange reserves
would recover in the coming years
as the impact of government’s
economy diversification plan begins
to crystalise in the economy.
Specifically, he said, governments’
efforts at revalitalising the
agriculture sector, solid minerals,
manufacturing and taxation
will have massive impact on the
economy in the next three to five
He said with government’s
diversification project in full gear,
Nigeria’s economic growth and
development will no longer be
determined by movement in the
prices of crude oil.
He said a lot of revenues will be
derived from taxation going adding
that the country’s low comparative
tax revenue to Gross Domestic
Product (GDP) ratio which stands
at about seven per cent, against 18
per cent average in most developing
countries, would be improved on as
the country begins to gain strength
in production.
He said that by simply paying
taxes by individuals and corporate
bodies, government can secure
the needed fund to fund major
developmental projects.
“You can see that in the
manufacturing sector, some factories are operating below capacity. But
with the ongoing implementation
of President Muhammadu Buhari
policy on diversification of the
economy and revatilising the
power infrastructure, the sector will
pick up and create more jobs for the
people,” he said.
Nwankwo said achieving selfsufficiency
in power will enable
government generate more income;
companies will be able to pay more
taxes, thereby helping government
diversify its revenue bases.
“In the next five to seven years,
solid minerals will be exported. It is
possible that in the next five to seven
years, the whole picture of Nigeria
will be a complete turnaround
because of government’s economy
diversification plan,” he said.
He urged Nigerians not to be
depressed because of drop in crude
oil prices.
“We have no reason to be
depressed just because crude oil
price is down. We have to see the varieties of opportunities
available for the country to
grow the economy based on a
well-diversified and sustainable
manner. We as responsible
stakeholders in the economy,
should emphasise these
opportunities,” he said.
“Indeed in other countries,
the major source of revenue is
taxation. Taxation should also be
explored. Government should be
able to sustain itself with taxation
revenues. Now with the better
tax compliance, and effective
sanctions for defaulters, we have
a room to boost public revenue
from taxation.”
The DMO boss said government
has made significant progress
in agriculture adding that in the
next five to seven years, Nigeria
would have reduced its reliance
on imported foods, tackled
unemployment and created
huge jobs for the people because
production is synonymous wit job creation.
He said the 2016 budget focus is
to address structural challenges in
the economy while providing the
enablement to create diversification
and self-sufficiency growth.
He said that out of the N2.2 trillion
budget deficit, N1.84 trillion will
come from borrowing from both
local and international markets.
“This is the first time that the budget
specified that all borrowed funds
will be for capital expenditure. The
sharing of internal and international
borrowing is almost 50/50. We have
been borrowing locally, but we have
to take advantage of the relatively
low cost of funds externally. We
do not want to borrow too much
from the domestic economy, so that
we do not crowd-out the domestic
environment,” he said.
He said that given the challenges
the economy is going through, much
depends on what the media reports.
“The media is critical, because
what the media tells the international
community will determine
investment flows into the country.
It is our responsibility to continue
working hard to ensure the resilience
our economy exhibited is sustained,
until we achieve the turnaround that
will come with diversification,” he
Nwankwo said the Nigeria
economy was not supposed to be oil
dependent given the level of natural
resources abundant in the country.
“We have to remind ourselves, that
in the first instance, our economy
was not supposed to be dependent
on oil, yes, historically, oil revenues,
has dominated our foreign exchange
earnings up to 90 per cent and
above, and public revenue about 70
per cent, but for many years, oil has
contributed less than 20 per cent to
the GDP,” he said.
He said the Manufacturing,
Commerce emerging sectors like
Entertainment, Music, Nollywood
and ICT contribute over 80 per cent
to the GDP and should be supported

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