the report, “Nigeria: Looking beyond Oil,” that raises the Nigerian economy to the top 10 in the world in 2050 with a projected GDP of $6.4 trillion.
Examples of such extrapolations are numerous and wide-ranging. A 2018 World Bank report on Business Reforms in Nigeria noted improvements in starting a business, dealing with construction permits, registering property, getting credit and paying taxes.
Consequently, Nigeria’s status on the Ease of Doing Business index has started to show signs of improvement.
Nigeria’s potential has remained largely untapped as the country’s previous growth was fueled by consumption and high oil prices.
Because Nigeria is heavily dependent on oil which accounts for about 90% of export earnings and over 70% of total government revenues, Nigeria’s commercial activities were adversely affected by declining oil prices with its economy contracting by 0.67% and 2.06% in the first and second quarters of 2016 respectively.
Successive quarterly contractions in 2016 and an annual growth rate of -1.6%, the first full year contraction since 1991, meant Nigeria officially entered a recession in 2016 which lasted till Q2 of 2017.
The slowdown in economic activity was compounded by an inadequate supply of foreign exchange, worsening inflation (peaking at 18.72% in January 2017 from 9.62% in January 2016) and inability to access foreign exchange at the official window for certain items which form inputs into the agriculture and manufacturing sectors.
By the third quarter (Q3) of 2017, Nigeria officially exited the recession and commenced implementation of the government’s Economic Recovery and Growth Plan (ERGP) which focuses on diversifying the country’s economy.
The ERGP articulates the Government of Nigeria’s vision for the country and lays the foundation for long term growth with an underlying philosophy to optimize local content and empower local business using driving factors such as an increase in agricultural output, increase in the country’s oil production, recent gains in manufacturing, telecommunications, and real estate, and the expansionary budget of the Nigerian government. Currently, Headline Inflation is on the rise as the one-year figures for June 2018 (11.23%) to June 2019 (11.40%) indicates. Analysts have predicted that the figure will rise to about 11.42% come 2020.
The country continues to experience some development challenges such as non-inclusive growth, poverty, poor maternal and infant mortality indices, an underachieving education sector, and poor distribution of wealth amongst its citizens.
However, major impediments to development and trade include inadequate power supply, deficient transportation infrastructure, a slow and ineffective judicial system, and widespread corruption, especially in the public sector.
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