10 Major Economic Problems Facing Nigeria
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Nigeria has the largest economy in the whole continent of Africa. The
country has an expanding market in all sectors to include
manufacturing, financial, communication, technology, service and
entertainment sectors. Nigeria’s economy is also ranked as the
27th-largest economy in the world in terms of nominal GDP. The
calculation of nominal GDP does not take into account differences in
the cost of living in different countries and often does reflect the
standard of living of the country’s population. Nigeria’s economy
grows on an average of 2% while the population grows on an average of
about 3.0 percent. This explains the low standard of living, alarming
rate of poverty, unemployment rate, and the wide disparity in the
socio-economic status of the Nigerian population. This article is on
the economic problems of Nigeria, read on below:
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Major Economic Problems facing Nigeria
Unstable Policies and Initiatives
Nigeria has suffered instability of government in time past which has
resulted in unorganized government policies and implementation. Even
now, every new government administration in Nigeria often comes on
board with its own policy and initiative, they then abandon the
previous policies set up by the previous government. Hence, the
country is left with a long trail of poorly executed policies.
Economic plans and policies are supposed to be sustainable and
flexible so that any government that comes into power can keep on with
its implementation. However, this has not been the case in Nigeria,
the non-continuity of government projects is a major hindrance to
economic growth.
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Poor human development
Human resources play a significant role in the success or failure of
the economy and development of any nation or organization. Nigeria has
very poor human development. This is evident in poor educational
systems, poor remuneration and unemployment rate. Most of the problems
facing the Nigerian economy reflect the poor state of human
development. When the government does not make the development of the
people its priority, it reflects in the country’s economic growth.
Major background issues such as poor educational system, initiatives
for the development of the population need to be put in place and
effectively too, for there to be economic growth in Nigeria.
Corruption
Nigeria suffers from a culture of corruption. It has been woven into
the various sectors of the Nigerian economy and continues to eat it
up. For many years, Nigeria has profited a huge sum of money from
crude oil, this money, which is supposed to be used for the
development of the nation’s economy have gone down the drain due to
corruption. Nigeria is such a wealthy nation due to the abundance of
oil resources, however, the problem is that money from oil is looted
by the top public officials. Revenue generated from oil can be used to
create further sources of wealth such as industries to employ labour
and other national investments, instead, what we have in Nigeria are
public officials who heap up stolen public funds for themselves and
fill their pockets.
Lack of interaction between the government and the private sector
The government needs to foster interaction with the private sector.
The contribution of the private sector is crucial to building a
lasting economy. The government should initiate policies and
mechanisms for citizens and private organizations to articulate their
interests and work together with the government.
(adsbygoogle = window.adsbygoogle || []).push({});
Over-reliance of crude oil
Nigeria largely depends on oil for the bulk of its revenue. Recently,
there has been a fall in expected revenue in Nigeria due to the fall
in crude oil prices. The decline in projected revenue always affects
the funding of the country’s plans and projects. In 1973, there was
an increase in world oil price which produced rapid economic growth in
Nigeria and all around the world. In Nigeria, this also led to a great
influx of rural people into cities, thus agricultural production went
to a halt to such an extent that cash crops such as palm oil, peanuts
(groundnuts), and cotton were no longer significant export commodities
for the Nigerian economy. Nigeria was now forced to import basic food
commodities such as rice and cassava which can be grown locally. The
government neglected the agricultural sector. Although much of the
population remained engaged in subsistence farming, too little food
was produced for the country’s rapidly growing population, this
therefore increased costs of imports. This system (reliance on crude
oil) would have worked well if revenue generated from oil was constant
or increasing, but recently, there has been a dip in oil price. The
country finds itself in a regrettable position where it over-relied on
crude oil.
Lack of economic diversification
Most Nigerian governments have had very little commitment to
diversification of the economy. Nigeria is endowed with natural
resources in the sector of agriculture and solid mineral resources.
Nigeria has a large expanse of land (77.7 percent of Nigeria’s total
land area), of this total, 37.3 percent is arable land. One then
wonders why there is very little generation of revenue for the
government, as well as employment from the agricultural sector. Also,
the agricultural sector in Nigeria is still largely labor-intensive
rather than capital. This explains the low global demand for the
country’s products globally and the very little foreign exchange
earnings from the agricultural sector. Consequently, the Nigerian
economy suffers loss because it lacks the capacity for ensuring long
term growth and sustainability.
Low export earnings
The oil sector accounts for less than 10% of the country’s export
earnings yet even the non-oil sector that contributes about 90% of the
country’s GDP records less than 10% of the country’s export
earnings. This means Nigeria’s products are not globally competitive
enough to go beyond the country’s borders and fetch the country
significant foreign exchange earnings. The Nigerian government needs
to invest in the agricultural process to ensure the production process
reaches world standards so Nigeria can record higher foreign exchange
and expand the economy.
Insecurity
Nigeria has struggled with various security challenges such as
terrorist attacks in the north and increased violence among the
constituent units and militancy group in oil-producing states. The
lack of security has affected the economy as economic activities are
drastically halted and investors lose confidence in the nation.
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Lack of Infrastructure
Nigeria lacks basic amenities and infrastructures that will help
businesses thrive. For example, Nigeria still suffers from inadequate
power and water supply. Those in the manufacturing sector find
production very difficult under these kinds of conditions. Foreign
companies also find it hard to invest in Nigeria due to lack of basic
amenities.
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'https://nigerianfinder.com/wp-admin/admin-ajax.php', {action:
'mts_view_count', id: '290974'}); });
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Nigeria has the largest economy in the whole continent of Africa. The
country has an expanding market in all sectors to include
manufacturing, financial, communication, technology, service and
entertainment sectors. Nigeria’s economy is also ranked as the
27th-largest economy in the world in terms of nominal GDP. The
calculation of nominal GDP does not take into account differences in
the cost of living in different countries and often does reflect the
standard of living of the country’s population. Nigeria’s economy
grows on an average of 2% while the population grows on an average of
about 3.0 percent. This explains the low standard of living, alarming
rate of poverty, unemployment rate, and the wide disparity in the
socio-economic status of the Nigerian population. This article is on
the economic problems of Nigeria, read on below:
(adsbygoogle = window.adsbygoogle || []).push({});
Major Economic Problems facing Nigeria
Unstable Policies and Initiatives
Nigeria has suffered instability of government in time past which has
resulted in unorganized government policies and implementation. Even
now, every new government administration in Nigeria often comes on
board with its own policy and initiative, they then abandon the
previous policies set up by the previous government. Hence, the
country is left with a long trail of poorly executed policies.
Economic plans and policies are supposed to be sustainable and
flexible so that any government that comes into power can keep on with
its implementation. However, this has not been the case in Nigeria,
the non-continuity of government projects is a major hindrance to
economic growth.
(adsbygoogle = window.adsbygoogle || []).push({});
Poor human development
Human resources play a significant role in the success or failure of
the economy and development of any nation or organization. Nigeria has
very poor human development. This is evident in poor educational
systems, poor remuneration and unemployment rate. Most of the problems
facing the Nigerian economy reflect the poor state of human
development. When the government does not make the development of the
people its priority, it reflects in the country’s economic growth.
Major background issues such as poor educational system, initiatives
for the development of the population need to be put in place and
effectively too, for there to be economic growth in Nigeria.
Corruption
Nigeria suffers from a culture of corruption. It has been woven into
the various sectors of the Nigerian economy and continues to eat it
up. For many years, Nigeria has profited a huge sum of money from
crude oil, this money, which is supposed to be used for the
development of the nation’s economy have gone down the drain due to
corruption. Nigeria is such a wealthy nation due to the abundance of
oil resources, however, the problem is that money from oil is looted
by the top public officials. Revenue generated from oil can be used to
create further sources of wealth such as industries to employ labour
and other national investments, instead, what we have in Nigeria are
public officials who heap up stolen public funds for themselves and
fill their pockets.
Lack of interaction between the government and the private sector
The government needs to foster interaction with the private sector.
The contribution of the private sector is crucial to building a
lasting economy. The government should initiate policies and
mechanisms for citizens and private organizations to articulate their
interests and work together with the government.
(adsbygoogle = window.adsbygoogle || []).push({});
Over-reliance of crude oil
Nigeria largely depends on oil for the bulk of its revenue. Recently,
there has been a fall in expected revenue in Nigeria due to the fall
in crude oil prices. The decline in projected revenue always affects
the funding of the country’s plans and projects. In 1973, there was
an increase in world oil price which produced rapid economic growth in
Nigeria and all around the world. In Nigeria, this also led to a great
influx of rural people into cities, thus agricultural production went
to a halt to such an extent that cash crops such as palm oil, peanuts
(groundnuts), and cotton were no longer significant export commodities
for the Nigerian economy. Nigeria was now forced to import basic food
commodities such as rice and cassava which can be grown locally. The
government neglected the agricultural sector. Although much of the
population remained engaged in subsistence farming, too little food
was produced for the country’s rapidly growing population, this
therefore increased costs of imports. This system (reliance on crude
oil) would have worked well if revenue generated from oil was constant
or increasing, but recently, there has been a dip in oil price. The
country finds itself in a regrettable position where it over-relied on
crude oil.
Lack of economic diversification
Most Nigerian governments have had very little commitment to
diversification of the economy. Nigeria is endowed with natural
resources in the sector of agriculture and solid mineral resources.
Nigeria has a large expanse of land (77.7 percent of Nigeria’s total
land area), of this total, 37.3 percent is arable land. One then
wonders why there is very little generation of revenue for the
government, as well as employment from the agricultural sector. Also,
the agricultural sector in Nigeria is still largely labor-intensive
rather than capital. This explains the low global demand for the
country’s products globally and the very little foreign exchange
earnings from the agricultural sector. Consequently, the Nigerian
economy suffers loss because it lacks the capacity for ensuring long
term growth and sustainability.
Low export earnings
The oil sector accounts for less than 10% of the country’s export
earnings yet even the non-oil sector that contributes about 90% of the
country’s GDP records less than 10% of the country’s export
earnings. This means Nigeria’s products are not globally competitive
enough to go beyond the country’s borders and fetch the country
significant foreign exchange earnings. The Nigerian government needs
to invest in the agricultural process to ensure the production process
reaches world standards so Nigeria can record higher foreign exchange
and expand the economy.
Insecurity
Nigeria has struggled with various security challenges such as
terrorist attacks in the north and increased violence among the
constituent units and militancy group in oil-producing states. The
lack of security has affected the economy as economic activities are
drastically halted and investors lose confidence in the nation.
(adsbygoogle = window.adsbygoogle || []).push({});
Lack of Infrastructure
Nigeria lacks basic amenities and infrastructures that will help
businesses thrive. For example, Nigeria still suffers from inadequate
power and water supply. Those in the manufacturing sector find
production very difficult under these kinds of conditions. Foreign
companies also find it hard to invest in Nigeria due to lack of basic
amenities.
(adsbygoogle = window.adsbygoogle || []).push({});
(adsbygoogle = window.adsbygoogle || []).push({});
jQuery(document).ready(function( $) { $.post(
'https://nigerianfinder.com/wp-admin/admin-ajax.php', {action:
'mts_view_count', id: '290974'}); });
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