Nigeria’s Key Economic Sectors Stagnant, Urgent Reforms Needed for Growth – Economist
Nigeria’s economy has been facing significant challenges, with key sectors that are crucial for its economic growth remaining stagnant or declining. Professor Bongo Adi, a renowned economist from the Lagos Business School, highlighted this issue in a keynote address at the FATE Foundation’s Annual General Meeting. He noted that while the economy has shown some resilience, the real sectors, which should drive growth, are being hindered by the stagnation of nominal sectors like banking, oil, and telecommunications. These sectors, although profitable, have limited impact on job creation and broader economic development.
According to Adi, the economy’s resilience in 2024 was largely driven by three sectors—banking, oil and gas, and telecommunications. However, these sectors are not contributing significantly to job growth, a key factor in long-term economic stability. He pointed out that 68 percent of the Nigerian economy is not growing, leaving only 32 percent showing positive development. For Nigeria to experience a meaningful economic turnaround, Adi emphasized the need for at least half of the economy to show substantial positive growth, particularly in sectors that can lead to large-scale job creation and overall economic expansion.
Further, Adi stressed the importance of export-oriented industrialization for Nigeria’s economic future. He argued that Nigerian entrepreneurs must embrace global value chain strategies to improve the country’s manufacturing capabilities and export potential. He pointed out the current high dependency on imports for products like electronics, cars, and appliances, which places a heavy strain on the nation’s resources. Adi suggested that Nigeria should focus on producing at least some of the components of these imported goods to reduce this dependency and bolster local production capacity.
In conclusion, Adi urged that Nigeria’s economy must focus on enhancing domestic production and shifting towards export-led growth. By reducing reliance on foreign imports and increasing the country’s manufacturing output, Nigeria could build a more sustainable economy. This shift could not only help reduce the import bill but also foster the creation of jobs and stimulate economic growth in sectors that are currently underperforming.
SOURCE: VANGUARD