Oil fall: Nigerian economy needs total restructuring – Agbaje

From Ngozi Onyeakusi, Lagos

The Senior Consultant/Chief Executive Officer, RTC Advisory Services Limited, Mr. Opeyemi Agbaje has said that the falling prices of crude oil in the international market has placed Nigeria in a situation where policy makers must restructure the economy.

Agbaje made the observation while speaking at a forum, with the theme: “Review of Nigerian Economy in 2014 and Projections for 2015”, organised by the Finance Correspondents Association of Nigeria (FICAN), in Lagos, at the weekend.

“This is the type of restructuring whereby you don’t have any choice, but to it. Analysts and columnists have over the years been advising on most of these things, but now we don’t need to advise anybody.

“Whether government likes it or not, we will have to deal with the issue of the Nigerian economy. We would have to diversify the economy, reduce the size of government and increase investment in alternative sectors whether we like it or not. “The oil price is still falling and we don’t know where the exchange rate is heading to.

“But the reality is that whoever wins the election by February 14, 2015; and whoever comes into office by May, will have to deal with serious economic issues.

“The implication of higher exchange rate, higher interest rate, lower GDP growth, is lower consumption and lower purchases of goods and services.

“So, there are also possibilities of labour issues because both in private and public sector, there may be an inclination towards job losses. So, the outlook is going to be difficult. It is going to be a challenging outlook for managers both in the private sector and in government.

Speaking about the private sector, he noted, “For the private sector, this is the era in which managers will actually earn their pay because they are going to now have to do their job. There is significant uncertainty across variables.

“Now, there is nothing that can be taken for granted. People have to plan for interest rate, sales volume, exchange rate, political scenario and every other thing. There is a high level of uncertainty.

“My description of where Nigeria is in 2015 is multiple crossroads. So, we are at a junction in which there different roads. It is a potential explosive combination of political risk, economic uncertainty and a seeming social crisis. It is not the place a country want to be in 2015.

“Essentially, this is an era that would challenge the acumen of managers in the private sector and in the government.”