Skip to content

SME Guide

7 Key Areas Nigeria Must Improve to Become a Developed Nation

Nigeria is Africa’s largest economy and one of the most influential developing countries in the world. However, it continues to face monumental challenges that have inhibited its progress and prosperity. For Nigeria to achieve its ambitions and transform into an advanced nation, it needs to implement major reforms across these 7 key areas:

  1. Improving Governance and Institutions

Good governance establishes political stability, effective policymaking and robust institutions – all crucial ingredients for national development. Nigeria unfortunately scores low on global governance indicators due to factors like:

  • Weak rule of law – Selective application of laws, limited judicial independence, disregard of court orders by those in power.
  • High corruption – Nigeria ranks 154 out of 180 countries in Transparency International’s Corruption Perceptions Index. Public sector graft erodes trust in government.
  • Lack of accountability – Opacity in decision-making, misappropriation of funds, lack of independent oversight over politicians.
  • Insecurity – Terrorism, kidnappings, communal violence and crime undermine law and order.
  • Divisive politics – Ethnic, religious and regional divisions instead of inclusive nation-building.

To evolve into a true democracy, Nigeria needs to:

  • Strengthen its judiciary, law enforcement and anti-corruption agencies.
  • Reform electoral processes to ensure free and fair elections.
  • Increase transparency mechanisms and accountability standards for elected officials and bureaucrats.
  • Foster national unity and equal opportunity for all Nigerians regardless of ethno-regional differences.
  • Use technology innovations to enhance citizen participation, efficiency and responsiveness of government.
  1. Raising Living Standards and Alleviating Poverty

Poverty remains widespread in Nigeria with 40% of the population living below the national poverty line. Wealth distribution is extremely unequal and social safety nets are inadequate.

Key initiatives needed are:

  • Increasing the minimum wage and linking it to inflation.
  • Creating jobs through infrastructure development and growth of labour-intensive sectors like manufacturing and agriculture.
  • Expanding microfinance access for SMEs, entrepreneurs and self-help groups.
  • Developing affordable housing, healthcare and education to improve standard of living.
  • Targeted basic income schemes and cash transfers for extremely vulnerable segments.
  • Subsidizing costs of essential food, fuel and utilities.
  • Uplifting more citizens from poverty to grow the middle class.

Tackling multidimensional poverty requires long-term economic reforms for income growth coupled with welfare policies for vulnerable groups.

  1. Fixing Infrastructure Deficits

Nigeria faces a huge infrastructure financing gap of approximately $100 billion per annum, which constrains development. Key infrastructure upgrades needed are:


  • Expanding generation capacity and electrification rates across the country. Only 55% of Nigerians have access to grid electricity.
  • Investing in renewable energy like solar, wind and hydropower to diversify from fossil fuels.
  • Upgrading of ageing transmission and distribution infrastructure leading to frequent power outages.


  • Building highways, railways, airports and seaports for multi-modal connectivity between cities and regions.
  • Expanding public transit systems to provide affordable mobility within congested metro areas.
  • Maintaining and rehabilitating roads/bridges, especially rural infrastructure.

Water & Sanitation

  • Increasing the coverage of clean piped water and sewage systems in both urban and rural areas.
  • Building climate resilient infrastructure to tackle flooding, erosion and water shortages.
  • Improving waste management systems and sanitation in slums and public facilities.

Mobilizing public investment, private capital via PPPs, multilateral funding and innovative financing models can help fund these massive infrastructure needs.

  1. Investing More in Health and Education

Human capital development through extensive investment in health and education systems has powered the rise of advanced nations. Nigeria still lags behind recommended benchmarks in these vital sectors.


Nigeria’s health outcomes like maternal mortality, infant deaths and life expectancy compare poorly even with lower-income peers. Issues to address are:

  • Inadequate government health spending – less than 7% of the budget versus the 15% target set by the Abuja Declaration.
  • Shortages of doctors, nurses, drugs and medical equipment due to understaffing and underfunding of health facilities.
  • Lack of universal health coverage – high out-of-pocket costs prevent access for the poor.
  • Poor nutrition and sanitation exacerbated by poverty.
  • Prevalence of communicable diseases like malaria, and typhoid along with rising non-communicable diseases.

Raising both government and private healthcare investments to improve access, infrastructure, staffing and drug supplies is vital for a healthier populace.


While Nigeria has expanded enrollments, quality concerns persist across its education system:

  • Low learning outcomes – 80% of primary 4 students cannot read or write.
  • High dropout rates – Only 61% of 6-11 year olds regularly attend school.
  • Dilapidated facilities and lack of qualified teachers.
  • Gender & income inequalities in access to education.
  • Skills mismatch between graduates and labour market needs.

Major reforms needed are:

  • Increasing education’s share of the budget from 7% currently.
  • Recruiting and upskilling more teachers.
  • Building classrooms, labs, libraries and other infrastructure.
  • Expanding vocational training options.
  • Improving curriculum design and learning materials.
  • Partnering with the private sector for education delivery.

Advanced nations invest heavily in health and education. Nigeria must follow suit to create a world-class workforce.

  1. Diversifying the Economy

Nigeria’s undiversified economy centres on oil, which provides 95% of foreign exchange earnings and 75% of budgetary revenues. However, oil dependence makes it vulnerable to price crashes. The need is to:

  • Grow the agricultural sector – it employs 70% of the labour force but accounts for only 25% of GDP due to low productivity. Increased mechanization, access to inputs and climate-smart techniques can raise both yields and value addition.
  • Boost manufacturing through ‘Make in Nigeria’ initiatives. This sector is currently comatose at just 10% of GDP. SMEs need access to affordable credit, infrastructure and skills.
  • Develop digital economy sectors like fintech, e-commerce, startups and IT. Lagos is emerging as a tech talent hub. Regulatory support and funding ecosystem can catalyze more digital innovation.
  • Build tourism and hospitality given Nigeria’s rich culture, music, festivals, cuisine and natural attractions. However, issues like security fears and poor infrastructure constrain the sector.
  • Promote creative industries leveraging Nigeria’s film/music talents and sports resources. Both generate significant employment, exports and public engagement.

Economic complexity and competitiveness determine a nation’s prosperity. Nigeria must mobilize its resources across more sectors.

  1. Improving Ease of Doing Business

Nigeria was ranked 131 out of 190 countries in the World Bank’s 2020 Ease of Doing Business index. Challenges cited by investors include:

  • Weak contract enforcement and lengthy dispute resolution.
  • High corporate taxes – 30% federal and state rates.
  • Multiple overlapping taxes and levies.
  • Customs hurdles and trade barriers.
  • Forex restrictions and limited capital mobility.
  • Regulatory red tape and bureaucracy around business licensing, and permits.
  • Onerous border and port processes inflating logistics costs.

By making it easier for domestic and global businesses to operate, Nigeria can attract more investments and integrate into global value chains – a prerequisite for advanced economies.

  1. Empowering Women and Youth

Nigeria has one of the most youthful populations in the world with a median age under 18. Women also comprise 48% of the populace. However, both groups face socioeconomic disadvantages:

  • High youth unemployment at 33% compared to the national average of 27%.
  • Low female labour force participation – only 50% versus 80% male rate.
  • Less access to education, digital skills, and health services especially for girls and women.
  • Discrimination in inheritance, assets and land ownership rights, financial inclusion.
  • Underrepresentation in politics and leadership positions.
  • Vulnerability to exploitation, trafficking, violence.

Promoting gender equality and investing in youth development through policies like employment quotas, increased economic participation, political representation, education and skilling initiatives can maximize Nigeria’s demographic dividend.


For Nigeria to achieve its ambition of becoming one of the top 20 economies by 2030, it must pursue an aggressive reform agenda. The 7 priority areas highlighted need coordinated action between policymakers, the private sector and civil society. With its immense market size, resources and entrepreneurial people, Nigeria has the potential to transform into a prosperous developed nation. But the execution of prudent strategies on economic diversification, governance, health, education, gender empowerment and other spheres is vital to turn its promise into tangible progress. The time for Nigeria to rise as a continental leader and global powerhouse is now.


Leave a Reply

Your email address will not be published. Required fields are marked *