Focus on Nigeria: Key Development Areas

Nigeria is the most populous country in Africa and the largest GDP. Yet, more people live below the poverty line, 83 million, than the total population in any other African country, except for Egypt, Ethiopia and the DRC. 

Nigeria is a middle-income country, Africa’s largest oil exporter and biggest economy. It has a population estimated at 208 million (World Bank). Unemployment is currently sitting at 27 per cent, and poverty at 40 per cent, i.e., 83 million people live in extreme poverty with less than $1.90 a day (AfDB). The unfulfilled Nigeria Vision 20:2020 (NV 20:2020) had identified three key areas of development that, if improved, would better the lives and well-being of Nigerians, namely the economy, governance and sustainable development.

1) The economy 

Works are underway to replace NV20:2020 with the Medium-Term National Development Plan (MTNDP) 2021-2025 and produce a longer-term plan, namely Nigeria Agenda 2050 (Nigerian’s FMIC). Financing such an ambitious plan requires a great deal of funding. Unfortunately, government revenue isn’t enough and guaranteed because of oil price fluctuations. Oil represents half of the government revenue (World Bank). Moreover, government debt’s service is high, despite debt (per cent of GDP) being relatively sustainable at 35.1 per cent in 2020 (IMF). Debt service represented more than half of the fiscal (collected) revenues in 2020 (AfDB). 

Maybe even worse, the country’s vision or development plan such as NV 20:2020 and soon the MTNDP resemble a wish list. The reason being, clear, specific and sustainable fundraising sources to finance every one of the strategic initiatives mentioned in the plan is usually not identified and discussed in depth. The MTNDP should seek to address this specific issue of sources of fundraising (Sarah Alade). If funding for a strategic initiative isn’t available, it should be excluded from the plan. The plan should remain specific, targeted and focused on the economic, social and environmental priorities that are achievable, affordable and sustainable. 

2) Sustainable development 

It is well-documented that the UN Sustainable Development Goal number seven (SDG #7) on clean and affordable energy for all will not be achieved by 2030. In addition, SDG #1 (no poverty), SDG #2 (zero hunger), SDG #3 (good health & well-being), SDG #4 (quality education) and SDG #8 (decent work and economic growth) are arguably off-target too.

Regarding SDGs #1 and #8: as suggested above, Nigeria has a double-digit unemployment rate of 27 per cent and a poverty rate of 40 per cent (AfDB). Moreover, another 25 per cent or about 53 million Nigerians, are vulnerable; and due to the Covid-19 pandemic’s adverse effects on the oil price and the economy, estimates show 5 million Nigerians will fall back into extreme poverty (World Bank). The fact that the population growth (2.6% currently) rises faster than the economic growth drove another 2 million vulnerable people into extreme poverty last year alone (World Bank). (Projections show Nigeria’s real GDP growth to be 2.5 per cent in 2021; up from -1.8 per cent in 2020 – IMF).

Regarding SDG #2: Nigeria is experiencing higher food prices (AfDB). The IMF forecast inflation to still be a double-digit number in 2021 and 2022, at 16 per cent and 13.5 per cent, respectively. This high inflation can partly be due to transport and logistics’ disruptions because of the Covid-19 pandemic that has affected domestic supplies, the taking away of fuel subsidies and electricity tariff increases (AfDB).

Regarding SDGs #3 and #4: Nigeria ranked 168 of 173 in the 2020 World Bank human capital index. This context suggests that the country loses a great deal of human capital through poor education and an inefficient healthcare system (World Bank).

3) Governance 

Nigeria ranked 149 of 179 countries in the world on the 2020 Transparency International’s Corruption Perception Index (CPI) with a score of 25, on a scale of 100 (very clean) to 0 (highly corrupt). There is a negative correlation between the level of corruption and long-term economic growth and foreign investment per capita (Jia Shao, et al.). This suggests that Nigerian governance issues stifle the country’s economic transformation. 

To sum up, to transform its economy, Nigeria should be effective in the fight against corruption, have a robust implementation of the SDGs, and improve the quality of education and healthcare service delivery.

This article was written by Hugue Nkoutchou and published with permission.

For more information on business opportunities in Nigeria, please reach out to us here.

Looking to generate leads and develop your business in Africa and the Middle East?
Book a free demo.

You have Successfully Subscribed!

Did you find what you were looking for?

Join our mailing list to receive the latest news and updates from our team.