Path to Nigeria’s economic growth, by Oxford Business Group
Indeed, the global publishing, research and consultancy firm noted that though the nation is on track to become one of the world’s 20 largest economies by 2020, with average yearly growth of seven per cent in the past decade, sustained investments in key major areas of services, manufacturing, agriculture and banking, would aid the nation’s sustainable growth.
In its latest publication on the country’s economy, “The Report: Nigeria 2015” and new infographic entitled “Nigeria: a post oil economy”, the OBG noted that though the economic policy of the incoming Buhari administration had yet to be clarified at the time of printing, investors expect the structural changes that have already been launched across some sectors to be seen through.
On sectoral performance, the report showed that with Nigeria reducing its reliance on oil, the services industry is moving centre stage as figures from the Nigerian Bureau of Statistics show services now account for 52 per cent of GDP, with information and communications technology (ICT) a key driver of growth.
Similarly, the report stated that the nation’s manufacturing sector has also expanded, increasing its contribution to GDP by five percentage points, adding that the agriculture sector has continued to improve in its domestic output.
“This is a solid performance that has prompted the government to set an ambitious target of boosting manufacturing’s role in the economy to 10% by 2020”, the report added.
“The overhaul to GDP data left Nigeria’s economy 89% larger than previously estimated, making it the biggest market across the continent. Nigeria boasts a medium-sized middle class in absolute, if not relative, terms, and benefits from having had its first peaceful handover of power since 1999 following the presidential electoral victory in March 2015 of Muhammadu Buhari over incumbent Goodluck Jonathan.
“As part of the Jonathan administration’s Transformation Agenda, efforts have been made to ease bottlenecks to growth, ranging from power generation and distribution to the agricultural value chain, premised on total infrastructure spending of $2.9 trillion over the next 30 years. Investors expect the structural changes that have already been launched – ranging from power sector restructuring to streamlining rules for doing business – to be seen through.
“In spite of the country’s traditional reliance on hydrocarbons, Nigeria’s industrial sector is diversified and growing, ranging from food and beverages to building materials. After a decades-long slump in manufacturing output, triggered by the scaling up of oil production in the 1970s, the country is working to reverse the trend and enable manufacturing and heavy industry to play a larger role in the economy.
“In the short and medium term, the government’s focus is on import replacement and addressing primary sector blockages, such as power, transport infrastructure and financing. The country’s solid fundamentals, including rising purchasing power, a growing population and limited penetration, make it an attractive long-term bet, as evidenced by the spate of new investments in recent years and the strong performance of companies in the FMCG, auto and building material segments”, the report showed.