Nigeria’s North will slog it out 40 years as economic disparity widens
By Jeph Ajobaju, Chief Copy Editor
Based on the “current growth rates,” it will take the North 40 years to catch up with the South as low growth has widened regional gaps, according to the World Bank in its assessment and forecast of economic metrics in Nigeria.
The mainstays of the Northern economy – agriculture, solid minerals and manufacturing – have not witnessed rapid growth in recent years, the World Bank said in its latest Nigeria Country Economic Memorandum (CEM).
The 72-page document, which describes the main trends and drivers of growth and job creation, covers 2000 to 2021.
It also outlines the key challenges and opportunities to speed up growth and create jobs, synthesising findings from recent analyses, including challenges and prospects in selected areas; while presenting policy options to sustain inclusive growth.
The report also highlights the sharp gap between per capita levels of Northern and Southern states, saying, “the poverty rate is almost 20 times higher in Sokoto – the state with the highest poverty rate, at 87.7 per cent – compared to Lagos—the state with the lowest poverty rate, at 4.5 per cent” quoting 2018/2019 data.
It says it will take Nigeria about a decade to get back to per capita income level pre-2014, that is, before the oil price shock that triggered the 2016 recession.
The report cites a comprehensive report on socioeconomic indicators and detailed explanations of trends showing the modest economic gains during the structural reforms of 2000 to 2010 were wiped in the following decade when the reforms were discontinued.
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Stagnated development
“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,” the World Bank said, per The Guardian.
“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 CEM identifies job creation as a potent option for accelerating poverty reduction and closing spatial inequality, and urges Abuja to unlock the opportunities in private investment to create quality and sustainable jobs.
“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.”
The CEM acknowledges oil remains Nigeria’s economic “backbone” and outlines policy options focused on enhancing macroeconomic stability and an overall business-enabling environment.
Its recommends improving the exchange rate system, removing trade barriers, increasing non-oil revenues and tackling inflation which pushed an estimated eight million Nigerians into poverty between 2020 and 2021.
It also calls for strengthening the rule of law and social cohesion as well as enhancing competitiveness by addressing key constraints to private investment such as poor power supply, protectionist trade regulations, poor access to finance, and low digitalisation.
“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.”
