With over 200 million people, Nigeria is Africa’s largest economy and the world’s eighth most populous nation. It has tremendous economic potential owing to its oil riches, large consumer market, entrepreneurial workforce and strategic geographic location. However, ineffective leadership, lack of long-term planning and policy inertia have inhibited Nigeria from harnessing its vast potential. This article examines how Nigeria can transform itself into a prosperous nation through smart reforms across key areas.
Improving Governance and Tackling Corruption
Nigeria’s governance track record has been very uneven since independence in 1960. The country has alternated between democratically elected civilian governments and military dictatorships. However, the quality of governance has remained weak. Key reforms needed are:
Strengthening Democratic Institutions
- Reform the electoral system to ensure free, fair and credible polls without violence. Update voting technology.
- Independent election commission to check fraud, and vote buying.
- Institute measures to increase women’s political participation through quotas.
- Independent judiciary without executive influence or interference.
- Empower parliament to rigorously monitor the executive branch.
- Greater devolution of powers and resources to local governments.
- Protect freedom of the press and civil liberties.
- Give anti-graft agencies like EFCC and ICPC more autonomy and enforcement authority.
- Adopt e-governance measures to reduce bureaucratic discretion and corruption.
- Enact strong anti-money laundering and asset recovery laws.
- Transparency in government contracts, and licenses through open bidding and RTI.
- Public sector reforms – merit-based recruitment, performance management.
- Harsher penalties for both bribe givers and takers.
- Increase police resources, training, and technology to tackle crime and terror.
- Reform and reintegrate insurgents into society to reduce extremism.
- Conflict resolution initiatives to stem communal clashes.
- Strict gun control and border management.
- Youth development programs as prevention against violence, and radicalization.
- Save oil windfalls during price booms to safeguard future generations.
- Diversify the economy beyond oil dependency.
- Enforce ecological protections and local community rights in Niger Delta.
- Transparency in awarding prospecting licenses and taxing resource firms.
Good governance is the foundation for unlocking a nation’s progress.
Structural Economic Reforms
While Nigeria transitioned to democracy and grew rapidly in the 2000s, its economic structure remains largely unchanged. Urgent reforms are essential to correct structural imbalances.
Diversify the Economy
- Shift focus from oil to agriculture, manufacturing, services and digital economy. These sectors create more jobs.
- Develop solid minerals mining like gold, iron ore, and coal to earn export revenues beyond oil.
- Special Economic Zones – Attract export-oriented manufacturing firms by offering fiscal incentives, serviced land, and streamlined approvals.
- Skill development programs to move low-skilled labourers into higher productivity sectors.
Boost Domestic Industries
- Import substitution – Impose tariffs and quotas to protect nascent manufacturing sectors from foreign competition.
- Export promotion drives once firms attain competitiveness – financial incentives for exporters.
- Loosening trade restrictions like import bans on refined petroleum products and rice that create domestic monopolies. This will increase quality and choice for Nigerian consumers.
- Review pioneer status tax holidays which mostly benefit foreign MNCs instead of domestic firms.
Trade Policy Overhaul
- Fast-track ratification of the African Continental Free Trade Area (AfCFTA) agreement to access regional markets.
- Improve trade infrastructure – ports, roads, rail, cold storage – to facilitate exports and link to African supply chains.
- Liberalize and incentivize exports of services – financial, IT, creative, educational – and not just commodities.
- Attract FDI in export-oriented manufacturing. Review local content policies to balance growth and domestic skill development.
- Trade policies must strategically nurture domestic industry while also integrating into the global economy.
Access to Capital
- Expand lending by development finance institutions to priority sectors like agriculture, infrastructure, and SMEs.
- Increase venture capital and private equity funding for startups.
- Development of capital markets – listings, financial instruments, market infrastructure.
- Credit guarantees and subsidized interest rates to improve SME lending.
- Fintech innovations for financial inclusion of unbanked and underbanked.
Mobilizing capital from both public and private sources is imperative for structural transformation.
Investing in Infrastructure
Nigeria has a huge infrastructure deficit across energy, transportation, housing, digital connectivity and urban infrastructure. This impedes living standards and economic competitiveness. Key recommendations are:
- Reform loss-making state electricity monopoly to improve generation, transmission and collections.
- Boost renewable energy to reduce dependence on oil and gas – target 10% renewables by 2030.
- Replace ageing distribution infrastructure to reduce power cuts and losses.
- Increase electricity access from current 55% to full electrification by 2040.
- Expand road network and improve rural connectivity. Rehabilitate crumbling roads.
- Urban mass transit projects – bus rapid transit, light rail, water transport.
- Revive national carrier and concession airports to make air travel affordable.
- Privatize sea and railways for efficiency. More private sector participation is needed in infrastructure.
- Achieve nationwide broadband penetration. Spread 4G coverage beyond urban centres.
- Develop digital infrastructure for e-governance, digital payments and smart cities.
- Support the growth of startups in fintech, edtech, healthtech and other emerging tech sectors.
- Affordable housing projects through private developers and public agencies.
- Improve urban sewage, sanitation, waste management and pollution control.
- Smart city initiatives – ICT-led traffic management, solar rooftops, safety surveillance etc.
Infrastructure enables growth and improves living standards. However, a clear roadmap and capital mobilization strategy is required for Nigeria.
Investing in Social Infrastructure
While physical infrastructure like transport and energy enable economic activities, social infrastructure of health and education directly uplift human development.
- At 3.9%, Nigeria’s healthcare spent as % of GDP is one of the lowest globally. Increase budget allocation to 15% as pledged.
- Expand National Health Insurance Scheme coverage from the current 5% of the population to all Nigerians.
- Upgrade equipment, and improve medical staffing at public hospitals and clinics.
- Provide subsidized care for women, children and vulnerable segments.
- Partner with private hospitals on affordable treatments for non-communicable diseases.
- Promote indigenous pharmaceutical manufacturing and vaccine production capabilities.
- Increase education’s budget share from 7% currently closer to the 20% global benchmark.
- Recruit and professionally train more teachers to improve student-teacher ratios.
- Expand higher education and vocational training infrastructure for skills development.
- Bridge infrastructure gaps – functioning classrooms, desks, libraries, labs, and computers.
- Improve curriculum design and learning outcomes. Test students nationally and internationally.
- Leverage edtech to expand access and improve pedagogy.
Health and education uplift living standards and enable citizens to achieve their full potential.
Agriculture and Food Security
Agriculture is a mainstay of the Nigerian economy, employing about 70% of the labour force. However, the sector remains inefficient with 90% of farms being small, subsistence-level holdings. Key measures needed are:
- Support smallholder farmers through training, credit access, inputs, market linkages and agriculture extension services.
- Promote contract farming models that link small farms with bigger processing companies. Provides market access and technical know-how.
- Boost food processing through incentives for agro-industries. Add value to raw agricultural output.
- Mechanization and technology adoption – machinery, precision agriculture, hydroponics, greenhouse farming.
- Develop irrigation to reduce over-dependence on seasonal rainfall for cultivation.
- Strategic grain reserves and policies to ensure national food security.
- Export promotion of cash crops like cocoa, palm oil, cotton, cashews and agro-processed foods.
Nigeria has the resources to be self-sufficient in food and a major agro-exporter. Right policies and investment can transform its agricultural sector.
Leveraging the Services Sector
Services account for 40% of Nigeria’s GDP but there is room for much faster growth.
- Expand high-speed internet and broadband connectivity beyond urban centres.
- Invest in skills development – coding academies, and vocational IT training.
- Incentivize venture capital and angel funding for tech startups.
- Attract offshore IT services, and call center outsourcing.
- Build digital infrastructure for e-commerce and digital finance.
- Full implementation of Bank Verification Number scheme for identity management.
- Agent banking and mobile money regulations to broaden financial inclusion.
- Promote investment advisory services and capital market activity.
- Improve security situation and infrastructure – airports, hospitality industry capacity.
- Preserve heritage sites. Showcase festivals, cuisine, culture and ecotourism offerings globally.
- Relax entry visa rules for visitors from potential target countries.
- Provide professional training institutes for film, music and media skills.
- Combat intellectual property violations hurting creative sector revenues.
- Production incentives to produce Nigerian content for the global market.
Services can become a key differentiator and source of competitive advantage for Nigeria.
Micro, small and medium enterprises are the lifeblood of any economy. In Nigeria too, MSMEs employ over 80% of the workforce. To nurture this segment:
- Simplify business registration, licensing and other regulatory processes.
- Provide entrepreneurship education.
- Expand financial inclusion through microfinance, and dedicated SME lending schemes by banks.
- Establish MSME industrial clusters with shared infrastructure.
- Formalize informal sector businesses for taxation and regulation through supportive policies.
- Enhance MSME market access through e-commerce platforms, and public procurement quotas.
- Offer vocational training to improve business skills.
A vibrant MSME sector will broaden economic participation.
Nigeria has wide regional economic disparities, with South-South and South-West far ahead of Northern states on growth indicators. To ensure balanced regional progress:
- Infra, education and healthcare investments to bridge North-South gaps.
- Leverage each region’s strengths – South as a commercial hub, North’s agriculture etc.
- Incentivize private investment into remote and backward areas.
- Implement development plans specific to each geo-economic zone.
- Increase skilled workforce mobility between progressive and less advanced states through incentives.
- Devolve more economic decision-making powers and funding to states and local governments.
Reducing regional inequality through location-specific strategies can accelerate inclusive national development.
Nigeria possesses immense potential to become a leading global economy. But the country has so far failed to translate its human and natural resources into broad-based development. Pragmatic economic reforms, investments into both physical and social infrastructure, human capital development and nurturing MSMEs can put Nigeria on a high-growth trajectory. With visionary leadership committed to long-term structural transformation, Nigeria can fulfil its ambition of becoming a prosperous nation in the coming decades. The time to fix Nigeria’s foundation and work towards its economic potential is now.