According to the World Bank, given “current growth rates,” it will take the northern states 40 years to catch up to their southern counterparts.
The mainstays of the northern economy—agriculture, solid minerals, and manufacturing—have not seen rapid growth in recent years, the bank says, which has widened regional gaps.
The Bank released the Nigeria Country Economic Memorandum (CEM) in Abuja yesterday, and participants joined online from all around the world. The perspectives are contained in this document.
The main trends and factors influencing growth and employment creation are discussed in the 72-page report, “Charting a New Course,” which spans the years 2000 through 2021. It also summarizes the main obstacles to accelerating growth and creating jobs, as well as the potential and prospects in a few important areas, while also outlining policy choices to maintain inclusive growth.
According to the report, which uses data from 2018/2019, “the poverty rate is almost 20 times higher in Sokoto — the state with the highest poverty rate, at 87.7 percent— compared to Lagos—the state with the lowest poverty rate, at 4.5 percent.” This statement emphasizes the stark divide between per capita levels of northern and southern states.
It states that it will take the nation roughly ten years to return to the per capita income levels that were recorded before to 2014, or prior to the shock of the oil price that led to the 2016 recession.
The modest economic gains registered during the structural reforms of 2000 to 2010 were wiped out in the following decade when the reforms were discontinued, according to the document, which includes a comprehensive report on the nation’s socioeconomic indicators and in-depth explanations of the trends.
“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 push 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 the context of rising 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,” it argues.
The research calls on the government to open up chances for private investment in order to create high-quality, long-lasting jobs, citing job creation as a powerful strategy for speeding poverty reduction and reducing geographical inequality.
“To catalyse 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,” it adds even as it admits that oil remains the country’s economic “backbone.”
The CEM presents policy alternatives aimed at improving macroeconomic stability and an environment that is generally supportive of business. Some of the suggestions include enhancing the currency exchange system, reducing trade restrictions, raising non-oil revenues, and combating inflation, which it claimed had driven an estimated eight million Nigerians into poverty between 2020 and 2021.
Additionally, it calls for addressing major barriers to private investment, such as inadequate power supply, protectionist trade regulations, limited access to finance, and low digitalization, in order to strengthen the rule of law, promote social cohesion, and increase the country’s competitiveness.
“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,” the report assures.
