By: Aina Joseph Oluwagbogo.
There have been debates from every corner of the country on the way out of the danger of the mono economic nature of the economy. So many solutions have been suggested which the most dominant is diversification which is a policy aimed at shifting Nigeria’s attention from petroleum as a major source of revenue to other sectors.
Following most debates and ‘prescriptions’ focus is to be placed on the agricultural sector. In other words, rather than concentrate on the oil sector alone, agricultural products would also serve as a source of revenue to the country.
“President Muhammadu Buhari at the weekend in Yenagoa, Bayelsa State, vowed to see through his administration’s agenda to diversify the Nigerian economy away from its current mono status.
He said it was no longer viable for the country to depend on a sole product to pull out of its present stage of development noting that his vision to make agriculture the mainstay of Nigeria’s economy remains on course.
In a brief video, where he made the comments at the 21st Farmer’s Day celebration, under the aegis of the Nigerian Agip Oil Company’s (NAOC) Green River Project, Buhari lauded Nigerian farmers for rising to the occasion, noting that they remained critical stakeholders in Nigeria’s economic growth.
“Since oil seems to be the cash cow of the Nigerian economy, we have no option but to return agriculture as our mainstay.
“I wish you happy celebration and a productive planting season ahead. We need to return to old times, diversifying our economy can no longer be something we pay lip service to”, the President said in the short message”. (News credit: newsnow.co.uk)
The question burning in my heart is how long this would suffice for the shivering economy. Economic attention shifted from agriculture to petroleum during the oil boom of the 1973/1974 when there was a surge in international oil prices. Nigeria enjoyed the proceeds from this boom for quite some number of years but began to chew the bones when international oil prices began to drop. The effect of the downturn directly led to a drop in the revenue that accrues to the federal government. Thence, the call for diversification.
Agriculture is similar to petroleum in terms of vulnerability to market prices. Agricultural products are mostly not durable and when they are produced in large quantities, the price need to drop to encourage more purchases in order to avoid wastage. This prices are mostly low and therefore fail to cover costs of production leaving farmers and managers of farm products at a great loss.

Agricultural products as well as petroleum are vulnerable to fluctuations in market prices thereby leaving an economy that is dependent on them at an unstable angle.
To this end, to stabilize the Nigerian economy, diversification might not be a lasting solution but dividing attentions to other productive areas of the economy like the manufacturing sector, textile industries, tourism, education, infrastructures as the products of such fields are less vulnerable to market prices. Rather than diversify the economy, ‘multiversifying’ it would help have different baskets for our eggs.


From: http://economicplatform.ng/diversification-or-multiversification/