What do you know about economic growth in Nigeria?

Not much? Then you will find it interesting to listen to this short video where the renowned economist Ngozi Okonjo-Iweala, Nigeria’s finance minister, explains how to keep their high growth and make it sustainable:

Addressing fields such as technology, agriculture and infrastructure is fundamental to achieving sustainable growth not only in Africa but the developing world as a whole. To some extent it actually applies to the West as well.

What’s driving growth in Nigeria?

Nigeria has a two track story, according to Ngozi Okonjo-Iweala. The least familiar track is the one of opportunity that exists because Nigeria has grown at a rate of 7% per year during the last decade. It’s the largest economy in Africa and likely to continue to grow about 6% per annum.

Rising middle class

With their middle class gradually burgeoning and numbers of skilled workers constantly increasing not only Nigeria, but Africa, is turning into a vast and growing market for the world’s manufactured products, intermediate goods and services. Or as the minister puts it “an opportunity of growth driven by internal consumption”.

The growing middle class represents a new market for investors and manufaturers world wide.
The growing middle class represents a new market for investors and manufaturers world wide.

The growing middle class makes Africa less dependent on the oil anand mineral sectors and puts emphasis on services, manufacturing and agriculture, which will contribute to sustainable economic development.

UN figures actually show that investments in Africa often provide higher rates of return than anywhere else in the world. A new breed of leaders are also emerging on the continent that are realizing that Africa needs to take charge of her own development and destiny. They are determined to break the vicious cycle of political instability, corruption, poverty and underdevelopment. Success stories in Africa are seldom reported. In fact the image of the continent in Western media is negative since positive developments are mostly ignored. And the same applies to African media. Former Mozambiquan president Joaquim Chissano told me in 2004 that the negative focus of African media is contributing to the gloomy image Africa has in the rest of the world.

Creating jobs and equality priorities

Ngozi Okonjo-Iweala is, however, of the opinion that the quality of growth they have had so far needs to radically improve because it has resulted in rising inequality which is not a sustainable situation. Creating a lot of new jobs is, accoring to her, crucial. In her opinion that can be achieved by primarily focusing on agriculture and infrastructure, mainly housing. Apart from that she believes that Nigeria needs to construct a social safety net to alleviate the plight of those at the bottom of the ladder who sometimes don’t even have the skills needed to get a job.

Did you know that Nigeria is growing 7% per annum? Were you aware of how fast the middle class is increasing on the continent? Have you ever thought about exporting or investing there to cater to their needs? Did you know that return on investments in Africa is often higher than anywhere else in the world? Would you like Swedish clothing giant H&M be interested in moving manufacturing to Africa? Do you believe Nigeria’s high growth rate will continue? 

 Video: McKinsey & Company – Picture: Government ZA

38 thoughts on “What do you know about economic growth in Nigeria?

  1. What an informative post, Catarina, The media coverage of Nigeria is seriously lacking. At least In Terms of their economic growth anyway. It is certainly not one of the things I hear covered in the news when Africa is mentioned. Thank you for sharing with us.

  2. An intersting post on a country I rarely think about, particularly when I’m thinking of economic growth.

    1. It is isn't it, Leora. Hopefully the US and Europe will be forced to stop rigging world trade in their favour. Then Africa can start getting results and create jobs. The poor will not need to migrate to the West in the incorrect belief that they will be able to support themselves here. An abundance of them use people smugglers to get to Europe. If they survive the trip they find that there are no jobs for them here either. To support themselvese they have to beg, be used by unscrupulous employers or get into crime. Imagine that they paid, frequently got into debt for, approx. $10,000 for that.

  3. This was really interesting. I had no idea how well Nigeria was doing. We hear about India and of course China, but little is said about Africa’s progress, so this was very informative.

    1. It's great that things are moving well in Africa, isn't it, Debra. The sooner the US and Europe are forced to stop rigging world trade in their favour the better. Then Africa can really start performing and create jobs.

  4. Your post is quite informative and makes us aware of growth in Africa even though the media doesn't portray the continent with much positivity. 7% growth is phenomenal!

  5. There are hugh opportunities in Nigeria and other African Countries. I know that the Chinese and Indians are already trading with lots of the African countries but here in UK – most businesses are encouraged to look at USA, China, Brazil and sometimes India. A lot of trade advisers shy away from recommending the African countries as they think these countries are difficult markets. They are loosing out on the opportunity. The middle class in these countries are now earning good money and have the spending power to buy foreign luxury goods. I hope some of these businesses will visit Africa and seeing for themselves the opportunities they are missing.

  6. Interesting post… I have business and investment interest in Nigeria(I am a Nigerian living in Europe), so I have kept up with the economy and political developments in Nigeria. I think Nigeria has just started growing, China has been growing for 3 decades before the plateau their economy is reaching. I expect the Nigerian economy to follow the same path, the economy will continue to grow even at higher rate for the next decade. Although, the growth slowed down by last quarter of last year, this has been attributed to the election coming up this month and the next and, of course, the drop in oil prices- as the economy is still largely dependent on crude oil export. The political atmosphere has been charged more than ever, I expect this to translate into further growth after the elections- regardless of who wins. Since it is now clear to the political class that there is high level of intolerance to cluelessness, corruption and impunity; which has characterised the present government, the development so far has been driven largely by the private sector. I will say the economy development started with democracy in 1999, so I expect more responsible governance to translate into better growth. In the time being, while I watch the politics unfold, I invest in safer portfolio – Treasury Bills is one of the highest yielding. This is also spam-proof as well, since one relates mostly with reputable institutions. Also, I continue building network and fine tuning business plan for my next project in Nigeria. During my last visit to Nigeria, I could see the development taking place and myriads of opportunities waiting to be explored.

  7. I have been working on African Market since my Beginning of career in Pharma-Marketing.
    Opportunities in African markets are vast . As rightly Said it has been underestimated.Indian manufacturers need to focus on opportunities here.China has been silently Investing and capturing the market shares in many Industries.
    Thanks for The post and update Very nice Inspiring write up.!!
    Rajendra Deshpande.
    Business value India .

  8. I am constantly amazed that Africa is still portrayed in the Western media as mud huts and tribes of Zulu warriors with short spears and ox skin shields. I have been following Africa's growth on radio programs such as Motley Fool and the BBC World News but I can honestly say I have NEVER seen a photo of a modern African city or a manufacuting facility. It's like we are afraid to show how much they have grown while we stay stagnant.

  9. Investing in foreign markets is predicting in the future of that country. I know 7% growth is very impressive, I wonder how sustainable that is over the long term. Even China that once had a huge growth is having trouble sustaining that growth. It will be interesting to look at Nigeria in several years and see where it is then. Great article thanks for sharing.

    1. William, don't you think it would be a good idea to take into account that world trade is rigged in favour of the US and Europe? Considering that China is the biggerst economy in the world and India will take the second slot. We are losing our importance in the West and it's just a question of how long will it takes before the world economy is "un-rigged"? That will have a favourable impact on not only Nigeria but all developing countries.

  10. The answer to your question of what I know about economic growth in Nigeria is pretty much nothing. That is partly a reFlecttion of how the media covers Africa, as you mentioned. Informative post.

  11. It's not only Nigeria that is seeing high growth rates at present, but much of Sub-Saharan Africa – albeit these growth rates off a low base. When you consider the size of the African continent's population (approaching that of India and China) and its total GDP there's clearly a lot of room for growth. The laggard here is South Africa with a growth rate sub-2% due to having been the most advanced economy on the continent for decades, coupled with the current government's misguided policies.

    However, when investing in Africa it's important to recognise that corruption is a significant factor across the continent and this needs to be taken into account when doing a risk assessment.

    Having said that, if you go in with your eyes wide open and avoid getting involved with corruption, there are significant opportunities.

  12. I had no idea! Nigeria has grown at 7% per year for 10 years and it, the largest economy in Africa, is likely to keep growing at about 6%. Ngozi Okonjo-Iweala certainly seems to understand both the benefits and the possible problems. I hope that she continues to be an influence on progress.

  13. Like everyone else I did not know about the ongoing positive growth in Nigeria. Former Mozambiquan president Joaquim Chissano must have had it right on when he felt the negative focus of the African media contributed to the gloomy image Africa has in the rest of the world. If we hear anything about Nigeria or Africa in general, it does seem to be about the fighting, the people smuggling and rape of women and children. Not exactly inducement to investment. Glad to hear they are doing so much better.
    I was also impressed by Ngozi Okonjo-Iweala’s recognition of the fact that “the quality of growth they have had so far needs to radically improve because it has resulted in rising inequality which is not a sustainable situation”. and that creating a lot of new jobs and a social safety net is crucial. That is something that the Western leaders haven’t taken serious so far.

  14. Brilliant woman you bring to us Catarina, the economist Ngozi Okonjo-Iweala. That she recognizes the economic growth in Nigeria resulting in more inequality, and maybe hitting this early on, has to mean positive results. The only phrase I kind of shivered at was "social safety net." I'm all for helping people at the bottom of the ladder, of which there ALWAYS will be a bottom of the ladder, it is nature's balancing. In the USA, that "social safety net" has come to mean – dependency on government, the rich get richer, lack of self-responsibility, and more ill will. But maybe, Nigeria, with someone like Okonjo-Iweala in a leadership position, can make it work more effectively.
    My recent post Is Sitting Down Too Much an Invitation for Chronic Conditions and Disease?

    1. Glad you like my post, Patricia. Honestly, poor people in Africa is a huge problem in this world. Frequently they use people smugglers to get to Europe thinking they will get the kind of life people in Western soap operas have. Thousans and thousands of them die on the way to Europe. And if they make it there is nothing for them here either. But somehow they have to support themselves. So they either become beggars, used by unscrupulous employers or get into crime. Is that a better alternative than being depenent on the state where they come from? If it's correctly done they will get educated in their country of origin and hence have a better chance of getting a job.

  15. Fascinating post, Catarina. Like Jacquie, I haven't read or heard much at all about the economy in Nigeria. I had no idea they are experiencing such growth,or that the middle class is growing so quickly. Glad to hear the social net is expanding as well, to help pull up those at the bottom. Hopefully, this healthy new growth will help reduce the amount of corruption and the underworld, as what we have in Canada (and I'm sure many other parts of the world), is the many e-mails that originate in Nigeria promoting illicit financial transactions.
    My recent post the importance of trust

  16. Wow..interesting Catarina. Aside from an occasional article in The Economist, I rarely read about Nigeria! That is a remarkable growth number! Interesting…I have an acquaintance whose daughter, just graduated from NYU Business school is staring her company in Tanzania…banking! She has found the business environment there to be quite friendly! As always, very informative post!!

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