Nigeria’s Economic Growth Masks Underperformance in Key Sectors

Nigeria’s economy recorded a GDP growth of 3.84 percent in Q4 2024, yet millions remain in poverty as critical sectors lag behind. Water supply, electricity, transportation, and tourism struggle, hindering essential services and contributing to the persistence of poverty. Urgent reforms and interventions are necessary to ensure that economic growth translates into real benefits for citizens.

Nigeria’s economy, while recording a GDP growth of 3.84 percent in Q4 2024, still faces serious challenges as millions remain in poverty. Key sectors like water, electricity, transportation, and tourism are struggling, which hampers essential services for citizens and businesses alike. Despite the growth, issues related to access to clean water, unreliable electricity, poor transportation infrastructure, and stagnant tourism persist, indicating a deeper crisis that exacerbates inequality and livelihoods.

The water supply and waste management sector significantly underperforms, contributing just 0.18 percent to GDP in Q4 2024. Access to clean water is a major challenge, with only 10 percent of Lagos residents having direct pipe-borne access. A lack of government funding leads to health issues and a considerable deficit in sewage infrastructure, resulting in widespread waterborne diseases.

Nigeria’s electricity and gas sector also lags, contributing only 0.49 percent to the GDP, which is declining. The economy suffers a loss of $29 billion per year due to issues with power reliability. While many Nigerians lack access to sufficient electricity, manufacturers incur higher costs due to dependency on diesel generators.

The transportation sector fell to 1.10 percent of GDP as poor roads and a limited rail system continue to aggravate logistics. With around 70 percent of roads in poor condition, transportation becomes increasingly challenging and costly, especially for rural farmers. Rising fuel prices further compound the problem, straining both businesses and consumers.

Tourism remains untapped, contributing just 0.79 percent to GDP amid security challenges and high operational costs. In contrast to its peers, Nigeria has not capitalized on its tourism potential, leading to an annual income of only $400 million in tourism revenue. Investments in security and infrastructure are crucial to revitalize this sector and attract both international and domestic tourists.

Despite reported economic growth, many citizens feel disconnected from this progress. Economic experts emphasize the necessity of focusing on broad-based growth rather than solely prioritizing GDP figures. Sustainable growth for a trillion-dollar economy requires integrating efforts across various sectors for widespread benefit.

Urgent interventions are essential to address the neglect of water, electricity, transportation, and tourism sectors. The government must create a Water Infrastructure Emergency Plan to provide universal clean water access. Structural reforms in the power sector, alongside investment in transportation infrastructure, are critical to reviving these ailing areas.

The focus has often been on oil and finance, yet essential services must not be overlooked. Without significant improvements in these key sectors, millions will remain entrenched in poverty, and Nigeria’s long-term economic viability will be at stake.

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In summary, while Nigeria’s GDP shows growth on paper, the ongoing struggles within essential sectors like water supply, electricity, transportation, and tourism highlight a significant crisis. The poor performance in these areas directly contributes to widespread poverty and inequality. Strategic investments and reforms are imperative to transform economic growth into tangible benefits for the populace, ensuring that efforts are made to enable substantial improvements in living conditions.

Original Source: businessday.ng