Worried by the declining fortunes of the nation’s crude oil in the international market, the Lagos Chamber of Commerce and Industry (LCCI) has called on the Federal Government to reduce the benchmark for oil sales in the 2013 budget to $60 per barrel, from the current $75 per barrel.
Director General of LCCI, Muda Yusuf who stated this in Lagos, noted that this would enable government to begin looking for alternative revenue sources to run its activities.
He advised the government to borrow a leaf from the Delta State policy of “Delta Beyond Oil”, which focuses on diversification of the state’s economy against the backdrop of uncertainties in the oil market.
According to the LCCI boss, “It should be a national policy because we are in a very vulnerable state. A situation where we depend on oil for 80 percent of our revenue and 90 percent of our foreign exchange is very dicey.”
He called on the Federal Government to declare a state of emergency and peg the price of oil at $60 per barrel. Yusuf said government should also provide the enabling environment for the private sector to thrive, stressing that once the environment was right, people wouldl become very creative and more jobs would be available in areas least expected.
Yusuf referred to the progress made in the film/entertainment industry where many young people who were hitherto unemployed were now gainfully employed and contributing to the nation’s Gross Domestic Product (GDP). He stated that more Small and Medium Scale Enterprises (SMEs) would spring up and thrive if government invested in appropriate infrastructure.
While also agreeing that Nigeria ought to be planning for a future when oil would no longer be there, the Delta State Commissioner for Information, Mr. Chike Ogeah said, “Delta Beyond Oil is an initiative to effect a paradigm shift from the nearly 100 percent reliance on revenue from crude oil in driving the state’s economy. Its aim is to harness other resources in the state to create a vibrant economy away from oil which is a finite resource.”
Continuing, Ogeah said, “Areas of emphasis in weaning Delta State from dependence on oil are agriculture, ICT, developing other natural resources, including solid minerals, developing the huge manpower base, and creating a clement environment for investment and private enterprise to thrive.
On the specific areas of focus, he said, “The vision entails the development of a strong infrastructural base viz modern roads, efficient water transportation, efficient healthcare system, a world class educational system”.
Asked how much the State government has earmarked to realize the goal, the commissioner said, “Delta Beyond Oil is not a physical structure in terms of a building but an enduring vision to prepare the state for the inevitable drying up of hydro-carbon deposits. In effect, the vision does not come with any cost. The vision recognises the fact that despite relatively significant revenue from oil, Delta is faced with huge challenges, especially in the cost of developing critical infrastructure due to its tough terrain”.
The LCCI boss commended the ‘Delta Beyond Oil’ policy of Governor Emmanuel Uduaghan, stating that it should be a national policy. Although, Delta State is one of Nigeria’s major oil producing states and due to the principle of derivation, receives one of the highest revenue allocation monthly but the State Governor, Dr. Emmanuel Uduaghan through the ‘Delta Beyond Oil’ policy is already looking at the future when oil will be exhausted.
Also commenting on the ‘Delta Beyond Oil’ initiative, Mr. Olufemi Awoyemi, Founder/CEO, Proshare Limited said, “The initiative from Delta is laudable even if it is all hype. It helps provide a contextual framework for the much needed discussion not just as a resource limitation problem, an alternative seeking imperative or a diversification choice”
He said, “It goes to the heart of our federalism to encourage all states to identify their core competence or revenue stream – a key fundamental to states creation we failed to tick off on”.