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Quoted ‘the giant of Africa’ with rich natural resources, Nigeria has about 200 million population according to the 2006 Census, and is located on the western coast of the African continent. It has about 390 billion USD (2023), and according to word statics: Nigeria is projected among the top 5 World Biggest Economies By 2075.
The country of Nigeria shares common borders with other countries like the republic of Benin to the West, Cameroon to the East and Chad to the Northeast, and has a Coastline along the gulf of Guinea to the South. Its major cities are Lagos, Calabar, Port Harcourt and other recently emerging cities.
Nigeria’s Economic Structure:
Known for its diverse culture, Nigeria is blessed with rich minerals, green vegetation and other natural resources, including oil.
The structure of the Nigerian economy is broadly grouped into nine viable sectors, and each of them has its own significance:
1.The first number of these sectors is the Oil and Gas sector: Nigeria’s economy has always relied heavily on the oil and gas sector since the 1950s when Oil was discovered in the Niger Delta region, which soon became the country’s major source of revenue and has up to date been the sure sustenance of its foreign exchange.
As a major source of the government’s national revenue, this sector includes the exploration, production, and export of crude oil and natural gas.
2. Agricultural sector: As the key sector, employing a large portion of the t… population of Nigerians, Agricultural products and crops like palm oil, cassava, rubber, yam, and Cocoa are also major contributors to the country’s economic growth, which may be enough reason why the government has struggled to promote agricultural development. However, those efforts are denied to have been felt by Nigerian local farmers.
3.Transport and Logistics: This sector deals with moving of goods and people across and within the densely populated country of Nigeria by road, air, rail and sea. It has grown so big, as opposed to its previous times, as to the absorption of many employees. It’s indeed a growing sector like the others.
4.The services sector: This sector plays a significant role in Nigeria’s economy and has been growing steadily at Fox pace; and they include telecommunications, banking, retail, and tourism.
5.Production/Manufacturing Sector : Nigeria’s industrial capacity is underdeveloped, yet there is the presence of a growing progress in the manufacturing sector. And to reduce imports and promote indigenous manufacturing in the major industries like textile, food processing and cement industry, the government has made conscious efforts to protect the local manufacturers.
6.Technology and Innovation: In recent times, Nigeria’s technology and innovation sector was backward and unrefined with no motivation or progress but presently the sector has seemed to be expanding in areas such as software development, tech startups and fintech.
7.The Mining and Solid Minerals sector: If effectively developed and harnessed, the mining sector has potential for growth and export revenue due to the country’s large pool of mineral resources, which includes coal, limestone, tin and others.
8.Trade and Commerce: In Nigeria, markets and informal trading activities are common, as wholesale and retail trade are key parts of the economy. Organised trading activities, formal and informal petty businesses are also significant source of income for many Nigerian households.
9. The Construction and Real Estate sector : Due to Urbanization and infrastructure development, this sector has witnessed large-scale growth. These economic activities range from the construction of residential homes, roads, commercial properties, and other developmental projects.
The Nigeria’s Oil Boom Period
Nigeria’s Oil Boom period of the 1970s and 1980s witnessed substantial economic growth which resulted from rising prices of oil and increased oil production. As the government received more and more revenue from Oil exports, this period saw major infrastructure development such as new roads constructions, educational institutions and airports. There were more records of foreign exchange reserves and trade surpluses than deficits during the same period.
With the opportunity to export more at high favourable prices, Nigeria became one of the major oil producers and exporters in Africa.
However, this period of prosperity also came with a lot of challenges including wealth mismanagement, Corruption, and policy instabilities which even today has transcended into the current state of the nation’s economy.
Nigeria’s current economic situations are characterized by these comprehensive factors:
Heavy Reliance or Over Dependence on Oil:
Due to the country’s over dependence on oil exports, any fluctuations in global prices of oil can result in a large impact on it’s economic stability, as lack of diversification contributes to Nigeria’s economic issues of
.Hyperinflation
. High unemployment rates
- Fiscal Issues:
The government is grappling with fiscal deficits, and public debt was a concern. There were efforts to address these issues, but they remained significant challenges.
- Exchange Rate Instability:
The Nigeria’s exchange rate structure is imbalance and highly subjected to volatility due to such factors as:
.fluctuations in oil prices,
. High foreign debt burden
.poor availability of foreign reserves.
Due to lack of diversification and over reliance on oil sales, there is not enough available foreign reservers to cover for the government and citizens’ international transactions conducted in US dollars.
Therefore, to discourage importation of certain goods in order to save the few available dollars the government will regularly have to embark on currency devaluation, which further impact negatively on the country’s overall economy.
The projected statistic, by Goodman Sachs, for 34 countries including Nigeria are as follows :
🇨🇳 China: $57 trillion
🇮🇳 India: $52.5 trillion
🇺🇸 United States: $51.5 trillion
🇮🇩 Indonesia: $13.7 trillion
🇳🇬 Nigeria: $13.1 trillion
🇵🇰 Pakistan: $12.3 trillion
🇪🇬 Egypt: $10.4 trillion
🇧🇷 Brazil: $8.7 trillion
🇩🇪 Germany: $8.1 trillion
🇲🇽 Mexico: $7.6 trillion
🇬🇧 UK: $7.6 trillion
🇯🇵 Japan: $7.5 trillion
🇷🇺 Russia: $6.9 trillion
🇵🇭 Philippines: $6.6 trillion
🇫🇷 France: $6.5 trillion
🇧🇩 Bangladesh: $6.3 trillion
🇪🇹 Ethiopia: $6.2 trillion
🇸🇦 Saudi Arabia: $6.1 trillion
🇨🇦 Canada: $5.2 trillion
🇹🇷 Turkey: $5.2 trillion
🇦🇺 Australia: $4.3 trillion
🇮🇹 Italy: $3.8 trillion
🇲🇾 Malaysia: $3.5 trillion
🇰🇷 South Korea: $3.4 trillion
🇿🇦 South Africa: $3.3 trillion
🇹🇭 Thailand: $2.8 trillion
🇨🇴 Colombia: $2.6 trillion
🇵🇱 Poland: $2.5 trillion
🇦🇷 Argentina: $2.4 trillion
🇰🇿 Kazakhstan: $2.1 trillion
🇵🇪 Peru: $2.1 trillion
🇬🇭 Ghana: $1.5 trillion
🇨🇱 Chile: $1.2 trillion
🇪🇨 Ecuador: $0.7 trillion
With the above data signalling economic growth for Nigeria among the top four other countries to be seen at $13.1 trillion, there are major internal issues of great concern to be fixed by the government authorities, its financial experts and policy makers.
Working collectively with all body of the government, this is to say that, this projection is realizable with good governance, effective stable policies, good and conducive business environment, sectorial diversification, and proper wealth management of exports revenues.
