NIGERIA AS A MONOECONOMY

NIGERIAN AS A MONO-ECONOMY

Nigeria today is known as a mono-economy refers to the focus on one sector as its main source of income which is has affected the effective growth of country by its over reliance on the oil sector of the country. The Nigerian economy has over relied on crude oil as its only primary source of foreign exchange and income. Nigeria is a mono-economy because it highly depends on one export product which is known as crude oil, it has also led to the neglect of other vital sectors such as agriculture, mining, solid minerals, manufacturing, and skill acquisition programs that could diversify the economy and provide broader, more inclusive development. Since the oil boom of the 1970s, Nigeria has shifted focus from other productive sectors and placed all its economic strength on oil production. This overdependence has had significant effects on the country’s overall development and economic stability.

CHARACTERISTICS OF NIGERIA AS A MONO-ECONOMY

Nigeria has overdependency on oil, in which most of the income earned by the economy accounts from oil dependency. Oil accounts for more than 75% of Nigerians earnings and source of revenue, which has led to a large decline in other sectors which can advance the Nigerian economy.
The wide change and fluctuation in oil prices has become a main concern to the Nigerian economy making it unstable and overspending on oil due to price fluctuation.
Due to Nigeria depending only on the oil sector there is a large decline in other sectors that can promote and increase our revenue way beyond that of crude oil such as agriculture which is greatly forsaken, hereby economic diversification has been declined.

Revenue instability, because crude oil prices are controlled by the international market (OPEC decisions, global demand, political events), Nigeria experiences unstable revenue flows, which makes budgeting and long-term planning difficult. The oil sector is capital-intensive, not labor-intensive, meaning it doesn’t provide many jobs.

The high rate of unemployment becomes alarming due to Nigerian oil sector not being labor intensive but capital intensive in which it does not provide many jobs for the Nigerian youth, in which increases the level of crime rate in our society and poverty level in our country, Nigeria.

SOLUTIONS TO NIGERIA AS A MONO-ECONOMY
Diversification of the economy through agricultural practices, Nigeria has most fertile land in Africa and different varieties of crop and plants for consumption. Agriculture was formerly depended on by the Nigerian economy before oil was discovered, and it has the potential to create a large scale of employment opportunities, reduce food importation, and greatly foster and increase foreign exchange. The Nigerian government needs to support farmers with access to land, modern tools, fertilizers, loans, and storage facilities in order to invest in agricultural practices, not only boost food security but to also opens opportunities for agribusiness, exports, and rural development.

Development of the mining sector of the Nigerian economy needs to be focused on. Nigeria is blessed country with a vast range of minerals such as; gold, coal, limestone, tin, iron ore etc. Unfortunately, most of these are left untapped or are being mined illegally. The mining sector, if properly regulated and supported, can provide a new source of income for the country and reduce the over dependency on oil. The government should enforce approval of licenses, enforce environmental and safety standards, and partner with local and international investors to build proper mining infrastructure and place a ban on the illegal mining activities.
The investment in skill acquisition programs should be made mandatory for youths due to the fact that not everyone will work in an office or become a graduate. Nigeria needs to value and invest in skill acquisitions such as tailoring, baking, photography, coding, graphic designs etc. Setting up more skill acquisition and vocational centers, especially in rural areas, will empower many young Nigerians who can then become self-employed and even employers of labor in which skills-based empowerment reduces poverty and crime in the long run.

The country should also focus on exporting agricultural produce (like cocoa, palm oil, cashew, sesame seeds), solid minerals and also some handmade crafts, pottery as well. This will bring in foreign exchange and reduce dependence on oil exports. The Nigerian Export Promotion Council (NEPC) and customs authorities must work to reduce the stress and cost of exporting goods.

The Nigerian economy should encourage local manufacturing of products and reduce importing too many things from food to clothing to machinery. This weakens the value naira which has gone very low and has killed the local industries. To change this, the government should support local manufacturers with funding, stable power supply, and favorable policies. Nigerians should also be encouraged to “buy made in Nigeria” products, so that money stays within the economy and industries can grow.