THE CURRENT STATE OF THE NIGERIAN ECONOMY
Nigeria is one of the largest economies in Africa, with a gross domestic product (GDP) of $448 billion in 2019.
Nigeria’s economy is heavily dependent on oil exports, which account for over 90% of its export earnings and over 50% of government revenue.
In 2020, Nigeria recorded its deepest recession in four decades due to the COVID-19 pandemic, with a contraction of 1.92% in Q2 and 3.62% in Q3. However, it rebounded in the fourth quarter with a growth of 0.11%.
Inflation has been on the rise since the second half of 2019, reaching a four-year high of 18.17% in March 2021, mainly due to rising food prices.
The Nigerian government has been implementing various economic reforms aimed at diversifying the economy from oil and improving non-oil revenue sources. These include initiatives such as the Economic Sustainability Plan (ESP) and the Finance Act 2020, which introduced tax incentives for small businesses and digital transactions.
Nigeria is currently facing various economic challenges, including high unemployment, poverty, insecurity, and infrastructural deficits. The government is implementing measures to address these challenges, such as the National Social Investment Program (NSIP) and the National Gas Expansion Program (NGEP).
PROPOSED SOLUTIONS BY EXPERTS and POLICYMAKERS TO ADDRESS NIGERIA’S ECONOMIC CHALLENGES
1. DIVERSIFICATION OF THE ECONOMY
Nigeria’s economy is heavily dependent on oil exports, which makes it vulnerable to fluctuations in oil prices and other external factors. To reduce this vulnerability, experts have suggested diversifying the economy by promoting other sectors such as agriculture, manufacturing, services, and technology.
2. INVESTMENT IN INFRASTRUCTURE
Nigeria has significant infrastructure deficits, including road networks, power supply, and telecommunications. Investing in infrastructure can help boost productivity, attract more investors, and create more job opportunities.
3. PROMOTING PUBLIC-PRIVATE PARTNERSHIPS
The Nigerian government can partner with the private sector to address economic challenges and promote economic growth. Public-private partnerships can help finance infrastructure projects, improve service delivery, and enhance job creation.
4. TACKLING CORRUPTION
Corruption is a significant problem in Nigeria, and it undermines economic growth and development. Addressing corruption can help promote transparency and accountability in public institutions, increase investor confidence, and improve the business environment.
5. IMPROVING THE BUSINESS ENVIRONMENT
Nigeria ranks low in the World Bank’s Ease of Doing Business index, which makes it challenging for investors to do business in the country. Improving the business environment by reforming regulations, reducing bureaucracy, and enhancing investor protection can attract more investors and boost economic growth.
6. INVESTING IN HUMAN CAPITAL
Nigeria has a large youthful population, but many young people lack the skills and training necessary to participate in the economy. Investing in education, health care, and skills training can help develop Nigeria’s human capital and boost economic productivity.