Nigeria has being described as the largest economy in Africa by Gross Domestic Product (GDP), by the World Bank.
This was disclosed by the bank’s Country Director for Nigeria, Dr. Ndiame Diop.
According to him, Nigeria remains Africa’s largest economy despite the challenges faced by its private sector.
Diop made this disclosure while speaking at the Country Private Sector Diagnostic (CPSD) and Stakeholders Engagement in Abuja, Thursday.
The Country Director said while Nigeria receives far less Foreign Direct Investment (FDI) than its potential warrants—especially in comparison to countries like Indonesia and South Africa—it continues to hold its position as Africa’s biggest economy.
He noted that the CPSD report, set to be released in the coming weeks, will reveal the impact of private sector constraints on economic growth.
Diop stated that if targeted actions were taken to remove these obstacles, Nigeria’s economic potential would be significantly enhanced.
According to him, the current macroeconomic reforms have created a favorable environment for such changes. Diop cited Nigeria’s recent economic stabilization measures, particularly exchange rate market adjustments and improved access to foreign exchange, as critical steps that have already enhanced investment conditions.
He, however, outlined four key sectors where strategic reforms could unlock massive investment and job creation. The Director mentioned the Information Communication Technology (ICT) sector, where investment opportunities worth up to $4 billion could be realized. He pointed out that the sector has the potential of creating more than 200,000 jobs.
In agribusiness, Diop stated that the reforms could unlock $6 billion in investment and generate over 275,000 jobs.
According to him, the solar photovoltaic (PV) industry holds the potential for $8.5 billion in investment and more than 129,000 jobs. While the pharmaceutical sector could attract $1.6 billion and create more than 30,000 to 40,000 jobs.
He identified the ICT sector as a sector with high, unpredictable, and inconsistent right-of-way fees, levies, and informal charges. Comprising 30 to 70 per cent of broadband rollout costs—as a major barrier.
Diop argued that addressing these regulatory inconsistencies would be a game-changer for broadband expansion. He, therefore, acknowledged that the National Economic Council has recognized this issue. He noted that progress is being made through a World Bank-supported initiative.
Additionally, the Country Director pointed to challenges such as vandalism, limited financing for rural broadband expansion. He, therefore, stated the need for competitive access to wholesale fiber.
Diop informed that efforts are underway in collaboration with government agencies to resolve these issues. And that the World Bank, the International Finance Corporation (IFC), and private investors are prepared to support broadband infrastructure development.
Dr. Diop, however, described the Nigeria’s energy sector as difficult. But noted that renewable energy access, particularly solar PV, has been a bright spot. He explained that private sector investment in renewable energy has historically been hindered by high costs and unviable tariffs.
Diop, however, stated that the blended finance mechanisms supported by the World Bank and IFC have helped bridge this gap. Thus, making off-grid solutions more viable.
The Country Director pointed to the DES project, which aims to connect 17.5 million households and businesses to solar power. He gave that as evidence of growing private sector interest. He, however, stressed that reforms to improve Nigeria’s grid electricity supply remain crucial for industrialization.
source: The Nation
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