By Nigeria Today
The Nigerian economy is one of the largest in Africa. Since the late 1960s, it has been based primarily on the petroleum industry. A series of world oil price increases from 1973 produced rapid economic growth in transportation, construction, manufacturing, and government services. In the late 1990s, the government began to privatize many.
State-run enterprises, especially in communications, power, and transportation, enhance service quality and reduce dependence on the government. Most of the enterprises had been successfully privatized by the beginning of the 21st century, but a few remained in government hands.
At the turn of the 21st century, Nigeria continued to face an unsteady revenue flow, which the government attempted to counter by borrowing from international sources, introducing various austerity measures, or doing both at the same time.
In 2020, Nigeria experienced its deepest recession in two decades, but growth resumed in 2021 as pandemic restrictions were eased, oil prices recovered, and the authorities implemented policies to counter the economic shock. Nigeria was highly vulnerable to the global economic disruption ca
used by COVID-19, particularly due to the decline in oil prices.
In 2018, 40% of Nigerians (83 million people) lived below the poverty line, while another 25% which is (53 million) were vulnerable. The number of Nigerians living below the international poverty line is expected to rise by 12 million in 2019–2023.
The COVID-19 crisis continues to disrupt Nigeria’s labor market. While it now exceeds pre-pandemic levels, improvements have been primarily due to workers turning to small-scale, non-farm enterprise activities in retail and trade, the revenues of which remain precarious.
Nigeria’s economic outlook remains highly uncertain, While Nigeria has made some progress in socio-economic terms in recent years, its human capital development ranked 150 of 157 countries in the World Bank’s 2020 Human Capital Index.
The country continues to face massive developmental challenges, including the need to reduce the dependency on oil and diversify the economy, address insufficient infrastructure, build strong and effective institutions, as well as address governance issues and public financial management systems
THE EFFECTS OF LOW ECONOMY
In terms of income and opportunities, it remains high and has adversely affected poverty reduction. The lack of job opportunities is at the core of the high poverty levels, regional inequality, and social and political unrest. The containment measures mainly affected aviation, tourism, hospitality, restaurants, manufacturing, and trade. High inflation has also taken a toll on households’ welfare and high prices in 2020 are likely to have pushed an additional 8 million Nigerians into poverty in 2022.
In addition, flooding and rising insecurity could hamper agricultural production. High unemployment (27%), poverty (40%), and growing inequality remain major challenges in Nigeria. Nigeria’s public debt is relatively sustainable at 25% of GDP. But debt service payments are high, and the country’s ability to attract external private financial flows is hurt by macro-economic imbalances and policy uncertainty. Nigeria’s financing requirements require improved domestic revenue collection.
Nigeria Major Economy Sectors
The largest industries which drive the country’s economy and account for the bulk of its annual GDP are its Petroleum, Tourism, Agriculture, Services, and Mining industries.
The Agricultural sector 25.08% of GDP, the Trade sector 16.86% of The DP, the Mining sector 9% of GDP, and the Real Estate sector 6.85% dominate Nigeria’s economy. There was also a significant growth in the Financial Services, Communications, and Entertainment sectors.
The services sector – consisting of telecommunications, financial, and other services – is the largest in Nigeria, although it saw a slight decline, accounting for about 54.39% of GDP in 2020
Nigeria is known for its status as the largest country in Africa by population. Additionally, with a GDP of about 1.118 trillion dollars, the country has the largest economy on the continent and among the largest in the world.
The biggest industries in the country also employ a large number of the country’s workforce with the agricultural industry alone employing about 30% of the country’s total labor force. These industries are also responsible for the bulk of the country’s exports. The chief export commodities from Nigeria include petroleum, chemicals, palm oil, and cocoa. The total exports from the country are valued at $40.81 billion each year.
Nigeria ranks sixth worldwide and first in Africa in farm output. The sector accounts for about 18% of GDP and industry is also an important source of employment for millions of Nigerians as it employs about 30% of the country’s labor force. Nigeria has 19 million head of cattle, the largest in Africa. Though Nigeria is no longer a major exporter, due to the local consumer boom, it is still a major producer of many agricultural products, including cocoa, groundnuts (peanuts), rubber, and palm oil. Cocoa production, mostly from obsolete varieties and overage trees has increased from around 180,000 tons annually to 350,000 tons.
Agriculture is one of the most dominant industries in Nigeria. Most of the country’s agricultural production is carried out in the southern part of Nigeria which has ideal climatic conditions for agriculture. The northern part of the country is largely dry and primarily supports the herding of livestock.
Major agricultural products include cassava (tapioca), corn, cocoa, millet, palm oil, peanuts, rice, rubber, sorghum, and yams. In 2003, livestock production, in order of metric tonnage, featured eggs, milk, beef and veal, poultry, and pork, respectively.
Oil palms are among the chief export agricultural commodities in Nigeria. The country produces an estimated 8 million tons of oil palms each year, the bulk of which is destined for international markets.
One of Nigeria’s key foreign exchange earning industries is the country’s tourism industry. The country’s diverse landscape and wildlife make it a prime tourist destination in West Africa. The southern part of the country consists of sandy beaches and tropical jungles.
The forests of the Yankari National Park are home to herds of elephants which are a rare spectacle in a country where elephants are critically endangered. However, tourist attractions can also be found in the country’s major cities. As an example, Lagos has a large modern park known as Millennium Park which is an important tourist attraction in the city.
