The Chief Executive Officer(CEO) of Centre for The Promotion of Private Enterprise (CPPE),Dr.Muda Yussuf,has lamented low productivity of the nation’s non-oil sector.
Yussuf,in a statement,said the dwindling productivity in the non-oil sector reflects in the fact that the oil sector still accounts for over 50% of revenue and over 90% of the nation’s foreign exchange earnings.
His position is at variance with Vice President’s Yemi Osibanjo’s view,who said recently that the non-oil sector was adding value to the nation’s Gross Domestic Product.
Yussuf emphasized the need to scale up
productivity in the non-oil sector of the economy in order to enhance its contributions both to revenue and foreign exchange earnings.
He explained that the measure would make the economy more sustainable and stable.
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He also advocated the necessity to de-risk investment in the real sector of the economy to reduce the dominance of the service sector in the economy.
He added:”We cannot afford an economy that is very weak in production and the associated competitiveness challenges.This is the sustainable pathway to promote the self-reliance and backward integration agenda.
“There should be deliberate policy to plug into the global value chain rather than be consumed in building a wall around the domestic economy. There is need for periodic impact analysis of policy measures and intervention programmes to ensure the delivery of desired outcomes”
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He added that there should be regular engagement with stakeholders across sectors to get feedback from investors and stakeholders in order to gather empirical evidence to enhance the quality of fiscal and monetary policies.
He said service sector continues to dominate the contribution to GDP with a 49.65% contribution in the third quarter of the year.
This,he said, is an indication that productivity is much higher in the service sector compared to other sectors like manufacturing and agriculture as well as flexibility therein.
· Challenges of infrastructure, especially roads, railway and power are much less in the services sector. Infrastructure demands are not as high as what you have in the real sector,he said.
According to him,investment risk in the service sector is for most part lower than in the real sector and gestation period for investment is shorter in the service sector than in the real sector.
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He said the oil refining sector recorded the biggest sectoral contraction in the third quarter of 2021by 47.83% on account of public sector ownership of refineries and the associated burden of bureaucracy, political interference, poor management and transparency issues.
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He said Petroleum subsidy regime which practically blocked private investment in the sector,causing investment growth was stunted.
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He also said the crude,petroleum and gas sector contracted by 10.73% in the third quarter due to disruption in the production arising from insecurity in the Niger-Delta,crude oil theft and vandalization of oil production facilities,policy uncertainty and policy transitioning which affected the confidence of investors,difficult regulatory environment which are not investment friendly and weak investment sentiment on the back of the global decarbonisation programmes and energy transition initiative.
He added:” Attracting investment into the sector is becoming more challenging as a result of the global groundswell of decarbonization and energy transition programmes.OPEC quota which has been low for most part of the year”
