Abuja, December 15, 2022 - The latest Nigeria Country Economic Memorandum (CEM) describes the main trends, challenges, and opportunities for growth and job creation in Nigeria over the past 20 years and proposes a path forward with actionable policy options. Despite its vast natural resources and a young, entrepreneurial population, development in Nigeria has stagnated over the last decade and the country is failing to keep up with the GDP growth of its peers. Declining private investment and demographic pressure pushes young Nigerians to pursue opportunities overseas.
Nigeria was a rising growth star globally in the 2000s due to the implementation of several structural reforms in a context of increasing oil prices; yet this fast growth was not accompanied by robust job creation. Between 2001 and 2010, Nigeria ranked among the top 15 fastest growing economies in the world, with an average annual growth rate of 8.2. However, the hard-won income gains from the 2000s evaporated between 2011 and 2021, due to the lack of deeper structural reforms, global shocks, conflicting macroeconomic policies, and increased insecurity percent.
Creating more and better jobs is a necessary condition for accelerating poverty reduction and economic transformation in Nigeria. Unlocking private investment will enable the creation of more and better-quality jobs in a sustainable manner. To catalyze private investment and offer more opportunities to the youth, the priority is to restore and preserve macroeconomic stability, which has weakened in recent years due to conflicting monetary policy goals, over-reliance on oil exports, limited fiscal space, and restrictive trade policies.
The CEM outlines several policy proposals focused on boosting Nigeria’s macroeconomic stability and overall business enabling environment, such as: improving the exchange rate system; removing barriers to trade; increasing non-oil revenues; and tackling inflation which has pushed an estimated 8 million Nigerians into poverty between 2020-2021.
In addition, the report highlights the importance of strengthening the rule-of-law and social cohesion and enhancing Nigeria’s competitiveness by addressing key constraints to private investment, such as unreliable power supply, protectionist trade regulations, poor access to finance, and low digitalization. While there is no silver bullet to accelerate growth, Nigeria can become a rising growth star again if it implements a comprehensive set of bold reforms in a timely manner.