Also available
Nigeria's Economic Growth
Are the reforms implemented by the former administration paying off?
Nigeria’s problems in its oil and gas sector have been well publicised. The huge sector, essential to the country’s economy, is responsible for 97.5 per cent of export revenues, 81 per cent of the government’s budgetary revenues – but only 17 per cent of Nigeria’s gross domestic product (GDP). As a result of the 2008/9 global financial crisis and a sharp drop in oil prices, Nigeria’s GDP growth was three per cent in 2009, compared with 6.1 per cent in 2008. As oil prices recover, it is projected to rise to 4.4 per cent by the end of 2010 and 5.5 per cent in 2011.
This economic growth has largely been due to developments in the non-oil sector, which has been a strong driver of growth over the last ten years – growing by over nine per cent a year from 2003-7, in marked contrast to the period 1997 to 2000, when it grew by just 3.5 per cent. This increased growth has been helped by the introduction of the government’s National Economic Empowerment Development Strategy (NEEDS), a medium term plan which, in its second phase aims to drive growth by improving infrastructure through increased private sector participation. On a state level, NEEDS has its counterpart in the State Economic Empowerment and Development Strategy (SEEDS). In the first quarter of 2010, growth in non-oil output increased to 8.15 per cent, compared with 7.9 per cent a year earlier.
Two areas of the non-oil sector have excellent potential for future growth. The first of these, the telecoms sector has seen exponential growth, with a more than 30 per cent growth rate from 2006 to 2008 and an estimated 32.54 per cent in the first quarter of 2010, translating to an estimated annual growth rate of over 125 per cent in terms of the number of mobile and fixed line subscribers.
