A key regional player in West Africa, with a population of approximately 197 million, Nigeria accounts for about 47% of West Africa’s
The country has recently held national elections in 2019, for the sixth consecutive time since its return to democracy in 1999. The incumbent president, Muhammadu Buhari won the elections and would be sworn in for a second term on May 29, 2019. He has identified fighting corruption, increasing security, tackling unemployment, diversifying the economy, enhancing climate resilience, and boosting the living standards of Nigerians as main policy priorities his government seeks to continue to pursue in his second term up till 2023. Nigeria’s federated structure gives significant autonomy to states.
Between 2006 and 2016, Nigeria’s gross domestic product (GDP) grew at an average rate of 5.7% per year, as volatile oil prices drove growth to a high of 8% in 2006 and to a low of -1.5% in 2016. While Nigeria’s economy has performed much better in recent years than it did during previous boom-bust oil-price cycles, such as in the late 1970s or mid-1980s, oil prices continue to dominate the country’s growth pattern.
Moreover, the volatility of Nigeria’s growth continues to impose substantial welfare costs on Nigerian households. The onset of the oil price shock in mid-2014 confronted the government with the pivotal challenge of building an institutional and policy framework capable of managing the volatility of the oil sector and supporting the sustained growth of the non-oil economy.
Nigeria emerged from recession in 2017, with a growth rate of 0.8%, driven mainly by the oil sector. Growth was higher in 2018 (at 1.9%) and more broad-based; however, it still fell below the population growth rate, government projections
As the oil sector is not labor-intensive, and the non-oil economy was still relatively weak, nearly a quarter of the
Economic growth is expected to hover just above 2% in 2019 and over the medium term. The oil sector is likely to stagnate in the face of regulatory uncertainty, limiting investments in the sector. Agriculture may remain affected by conflicts and climate and weather events
Swift focus on macroeconomic and structural reform priorities articulated in the country’s Economic Recovery and Growth Plan (ERGP 2017-2020) by the renewed government administration and acceleration of their implementation could immediately promote needed economic resilience and can be expected to strengthen growth further than current projections.
While Nigeria has made some progress in socio-economic terms in recent years, its human capital development remains weak due to under-investment and the country ranked 152 of 157 countries in the World Bank’s 2018 Human Capital Index. Furthermore, the country continues to face massive developmental challenges, which include the need to reduce the dependency on oil and diversify the economy, address insufficient infrastructure, and build strong and effective institutions, as well as governance issues and public financial management systems.
Inequality in terms of income and opportunities
Last Updated: Apr 09, 2019