Economy
From The Report: Nigeria 2024
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Nigeria has the potential to reduce its reliance on energy exports and promote growth in other sectors of the economy. The prominence of the non-oil private sector is expected to increase, offering opportunities for job creation and export diversification. Eliminating differences in the foreign exchange rate and improving security conditions are expected to benefit Nigerian businesses. However, in order to improve the government’s fiscal position and free up resources to reduce poverty, it has been suggested that the country reduce subsidies, increase energy revenue and limit debt growth. The implementation of key initiatives – such as the recent removal of fuel subsidies and the use of pension funds to close the deficit in infrastructure funding – is likely to help ease inflation rates and improve economic conditions.
This chapter contains interviews with Kalim Shah, Senior Country Manager, Nigeria, Liberia and Sierra Leone, International Finance Corporation; Hajja Wakil, Acting Executive Secretary and CEO, Nigerian Investment Promotion Commission; and Uche Orji, Former Managing Director and CEO, Nigeria Sovereign Investment Authority.

Articles from this Chapter

Overview

Driving trends: Key targets include curbing inflation and improving security while the non-oil sector underpins recovery
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Driven both by the size of its population as well as by its vast energy reserves, Nigeria is one of Africa’s most dynamic economies. Oil production still accounts for a significant part of government revenue, but the country has seen increased contribution to growth from the non-oil sector in recent years. The services sector in particular has become an increasingly important engine of economic activity, with financial services, transport and telecommunications acting as key drivers of growth. Overall,…

Interview

Enhancing competitiveness: Aisha Rimi, Executive Secretary and CEO, Nigerian Investment Promotion Commission, on attracting foreign investment and increasing capacity building
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Interview: Aisha Rimi How attractive is the current economic situation in Nigeria for foreign investors? AISHA RIMI: Several competitive advantages underpin Nigeria’s attractiveness as a destination for foreign direct investment (FDI). First, according to the World Bank, Nigeria is the largest economy in Africa, with a GDP of $441bn in 2021 and a population projected to be the third largest in the world by 2050 – providing a large customer base and growing middle class. Second, Nigeria’s…

Interview

Funding the future: Kalim Shah, Senior Country Manager, Nigeria, Liberia and Sierra Leone, International Finance Corporation (IFC), on securing financing to boost economic diversification and trade
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Interview: Kalim Shah Why are public-private partnerships (PPP) key to delivering accessible and quality public services? KALIM SHAH: Infrastructure gaps cost Nigeria about 4% of GDP growth annually, according to a 2021 report from the World Bank. Rapid growth of the population projected to reach nearly 400m people by 2050, coupled with urbanisation has created strong demand for infra[1]structure development. Therefore, the country will need to spend around $100bn a year over the next 30 years…

Analysis

Expanding the base: The mobilisation of financial resources remains a top priority
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Attracting and diversifying government revenue has been a consistent objective for Nigeria. As the country is unable to rely on a larger pool of financial revenue streams, it has witnessed its budgetary and fiscal resources expand and contract in accordance with global energy prices in recent years. Furthermore, the budget is increasingly financed through debt, as public resources alone are insufficient to finance annual expenditure – which has added pressure on the debt-to GDP ratio. By 2024…

Interview

Defining priorities: Uche Orji, Former Managing Director and CEO, Nigeria Sovereign Investment Authority (NSIA), on boosting private – public collaboration and managing funds effectively
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Interview: Uche Orji What is your assessment of the measures required to diversify Nigeria’s revenue base? UCHE ORJI: Improving government revenue and diversifying sources of foreign exchange requires a three-pronged approach. First, diversification must be predicated on mass industrialisation to foster quality manufacturing standards. This entails providing financial support, an enabling fiscal regime and infrastructure, such as industrial zones. This will allow the country to specialize in certain…

Analysis

Cooperative ties: Increased bilateral trade with Africa aims to offset a decline in government-backed investment from China
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Despite global supply chain challenges, the value of trade between China and Africa rose to record levels in 2022. The increase partially reflected a shift in China’s policy away from government-backed investment and towards enhanced trade and cooperation. According to China’s Customs agency, the value of the country’s trade with Africa rose by 11% to $282bn that year, driven by an increase in exports to the continent. Looking to the future, trade volume looks set to continue this expansive…

Analysis

Ease of transfer: A number of remittance-focused start-ups and other players are expanding operations in emerging markets
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Financial technology (fintech) firms are gaining market share that was formerly the preserve of established remittance service providers. Remittances have grown in importance in recent years and currently constitute the largest source of foreign income for many developing economies. They also tend to be countercyclical, increasing during economic downturns or natural disasters when other capital flows generally dwindle. Growth in the segment has gathered pace, with the importance of remittances as…