How Nigeria slipped into economic recession, by experts

•Warn govt against excessive borrowing
• Classify country as a rental economy.

Running an oil-dependent economy, lack of sustainable developmental strategies, and mismanagement of Nigeria’s petroleum revenues have been identified as some of the reasons the country slipped into recession.

Experts, such as the Vice Chancellor, Federal University Oye-Ekiti. Kayode Soremekun, former Head of Department, Political Science and International Relations, Covenant University, Dr. Duruji Moses Metumara, all blamed successive governments for operating mono-product economy, which is vulnerable to economic challenges.

vThe Vice-Chancellor, Federal University, Oye-Ekiti, Kayode Soremekun, in an interview with The Guardian declared that Nigeria is not oil producing nation but a rental economy.

According to him, collecting rents from multinationals that are producing the country’s natural resources cannot be used as basis for development.

He feared that Nigeria may forget diversification and return to being mono-product economy once the oil price bounced back and production back on track.
Soremekun said: “Though the country’s is serious about diversification now that oil prices are at the bottom low. But my only fear is that if the oil price should bounce back, Nigeria may probably go back to its traditional slumber. There are chances that the oil price may bounce back.

“Right now, the Federal Government is negotiating with the Niger Delta militants and to that extent, the country might go back to the oil market and when that happens, the oil money will come on board again, and the Yemeni Sydrome will take over again.”

He said that Nigeria got into the economic recession on account of concentration on a mono-product, oil economy.  “I want to say that we did not have economy before. Nigeria economy focused on oil resources and lacked productive base.  Any economy that lacks productive base is a rental economy. That is an economy that depends only on rents and it can never be the basis for development.