How is Nigeria’s economy changing?
Nigeria has the largest economy in Africa, and one of the fastest-growing economies in the world. The graph below shows considerable growth in Nigeria’s GDP from 2000 to the present day.
Despite its rapid growth in GPD, Nigeria is a country with a significant inequality gap. Wealth is typically found in the south, in and around Lagos. However, the north is exceptionally poor. Almost half of Nigeria’s population live on less than US$1 per day.
According to Oxfam in 2017, “The combined wealth of Nigeria’s five richest men – $29.9 billion – could end extreme poverty at a national level yet 5 million face hunger. More than 112 million people are living in poverty in Nigeria, yet the country’s richest man would have to spend $1 million a day for 42 years to exhaust his fortune.”
How is Nigeria’s industrial sector changing?
The structure of Nigeria’s economy has changed significantly. Its economy has transformed from one mainly based on agriculture to manufacturing and services. Around 52% of Nigeria’s GDP now comes from manufacturing and services.
Mechanisation and rural-urban migration have led to a decline in the number of people employed in agriculture. Manufacturing and services have grown as a result of Nigeria’s increased political stability. Countries such as China, the USA and South Africa have heavily invested in Nigeria. There has also been considerable growth in the service sector, particularly in IT services.
The oil and gas industry has been very important to the Nigerian economy. Despite the country having the 11th largest oil reserves in the world and accounting for 90% of Nigeria’s international currency coming from oil, inefficiencies at refineries, the large domestic demand for energy and fluctuating prices have created an economic challenge. As a result, oil and gas only contribute around 9% to Nigeria’s GDP.
The fastest-growing sector in Nigeria is manufacturing. A combination of the cheap and plentiful labour force along with its huge market, both within and beyond the country has led to rapid economic growth.