June 2024

The Rise of the Nigerian Economy

The Rise of the Nigerian Economy

In the mid 1950’s, the economy of Nigeria changed dramatically. A country once heavily reliant on agricultural exports became one of the richest nations in Africa. Oil was discovered around the Niger Delta in 1954, and from there, the economy developed at an astonishing rate.

Today Nigeria is the most populous and richest area in Africa after South Africa, and Nigerians like Tunde Folawiyo are regarded as entrepreneurs of equal stature to their western counterparts. Such businessmen have used the oil industry to finance other ventures such as real estate and engineering, with the oil-rich nation having a solid capital base on which to develop the country’s infrastructure. Presently, the Nigerian economy is turning into a centre of world commerce, with finance playing an increasingly important role in the economy.

Previously, Nigeria has attracted criticism for failing to use the oil industry to benefit the rest of the country. However, businessmen such as Tunde Folawiyo have set a benchmark for investment in other sectors, and the oil industry accounts for only 14% of Nigerian Gross Domestic Product (GDP). Whilst Nigeria is still regarded as an emerging economy, it’s rising manufacturing sector accounts for 15% of the country’s GDP, with the service sector accounting for another 30%.

The development of the economy is due to the strong economic reforms taking place in Nigeria. With oil being a finite resource, modern governments have used the prosperity of the country as a springboard to develop the wider economy. Nigeria still retains a strong base in agricultural exports which account for 40% of GDP, and this is necessary for a sustainable economic model.

The challenge that faces the Nigerian economy is to leverage the oil deposits within the country to help reduce poverty. This is a challenge shared by many oil-rich economies, as it takes time to redistribute the wealth throughout the nation. As the oil market is based on potential wealth, and no oil-based economy can immediately ‘cash in’ its oil reserves, changes are being made to ensure a sustainable economic strategy is put in place.

To this end, Nigeria enforced the National Economic Empowerment Development Strategy (NEEDS) in order to address the balance, and reduce the country’s unhealthy over-reliance on the oil industry as well as addressing the flaws in the infrastructure. Along with similar initiatives run in co-operation with the United Nations, this should help to bring the Nigerian economy, infrastructure and standard of living in line with that of western nations.

The cultural change within Nigeria has also helped a move towards this goal. The country’s development was hobbled by a military dictatorship until 1999, when democracy was restored. During that time, corruption within the government was rife, and the country has made great strides towards long-term development of the nation.

Businessmen like Tunde Folawiyo are pioneering the rise of Nigeria as an economic power. Nigeria’s willingness to collaborate with other nations to build a sustainable economy is attracting major investment from those countries. Nigeria counts the USA and the UK as its main trading partners, and the democratic government is willing to learn from other countries to avoid the mistakes of the past and strengthen their position on the world stage.

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