Promise of growth: Non-oil revenue and infrastructure upgrades are key to sustainability and long-term development
Nigeria is Africa’s biggest oil exporter and, with a population of 193m, the region’s biggest economy and largest consumer base. While the government is reliant on oil and gas for its revenue, the economy itself is more diversified, with manufacturing, banking and insurance, retail, and agriculture all major contributors. However, each of these sectors could grow faster and create more opportunities if structural problems were overcome, among them, the country’s electricity shortage, corruption and bureaucratic bottlenecks.
Government efforts at positive change are underway, although these are often made more difficult by the boom-and-bust nature of oil prices. Oil accounted for 56.2% of government income at N4.1trn ($13.3bn) in 2017, according to the Central Bank of Nigeria (CBN); lower oil prices thus significantly impact revenues. A wave of optimism was generated when President Muhammadu Buhari won the election in 2015, but the slump in oil prices after mid-2014 created constraints.
OPTIMISM: The World Bank’s “Doing Business” report ranks Nigeria as below average by regional standards, even after it jumped 24 spots to 145th in 2018. Nigerian executives were nonetheless feeling optimistic about economic prospects in 2018, with 85% of respondents in OBG’s Business Barometer: Nigeria CEO Survey, published in September 2018, reporting that they have positive or very positive expectations for local business conditions over the coming 12 months. As the country heads into its next general election, scheduled to be held in February 2019, the Buhari administration can point to significant successes, such as new railroad lines and highways, as well as major progress in the fight against corruption. “Blatant corruption has been Agriculture is the single largest economic activity, accounting for 25.1% of GDP as of 2017 reduced,” Niyi Yusuf, managing director of professional services firm Accenture Nigeria, told OBG. However, an absence of landmark moments could mean that these improvements do not resonate widely with voters. “The wheel of justice is rolling slowly and as a result, there has been a lack of clear consequences,” Yusuf added.
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