Nigeria Country Private Sector Diagnostic

World Bank Group

Nigeria Country Private Sector Diagnostic

Autores

World Bank Group

Editor

Washington, DC: World Bank

Descripción

Nigeria has the potential to become an economic powerhouse. Its large and growing population and its regional trade ties through the Economic Community of West African States (ECOWAS) offer the potential for expanded markets for goods and services. Nigeria’s population is projected to grow by 45 percent by 2045, one of the largest increases compared to its peers. This should create opportunities for private firms, contributing to jobs and economic growth. The country’s rich agricultural and mineral resources create an opportunity for more private investment in food production and resource-based manufacturing to occur. Furthermore, a young, entrepreneurial workforce positions Nigeria to increase productivity and innovation through digital entrepreneurship. But Nigeria’s economic growth has been slower than its peers, job creation has been modest, and almost half the population still lives below the poverty threshold. There have been some recent promising developments, however. The Central Bank of Nigeria has enacted foreign exchange (FX) reforms that have led to the unification of FX markets and to a market-reflective exchange rate. The Central Bank of Nigeria has also tightened monetary policy and refocused on its core mandate of maintaining price stability. The government has embarked on a revenue-driven fiscal consolidation and tax simplification, including the removal of costly gasoline and FX subsidies. As a result, access to foreign exchange has been reestablished, lowering investment risks. Going forward, Nigeria will need to deepen structural reforms and reduce policy uncertainty. This report looks at four sectors where public policy actions could attract private investment: broadband/fiber-optic infrastructure, pharmaceutical manufacturing, solar, and cassava and soybeans. These sectors were chosen for their private investment potential if major constraints can be addressed, their impact on economic development, and the feasibility of removing constraints in the near term.