Nigeria Economic Outlook

• Growth remained robust in 2011 and the outlook for the near term remains favourable.
• The economy remains vulnerable to global economic shocks that weigh on the fiscal position and macroeconomic stability, threatening growth prospects.
• High rates of poverty and youth unemployment continue to persist in spite of robust growth.

Growth in the Nigerian economy was robust in 2011, driven mainly by the non-oil sector; in particular telecommunications, construction, wholesale and retail trade, hotel and restaurant services, manufacturing and agriculture. The outlook for the mid-term remains positive. To mitigate the negative impacts of the global economic crisis, the government pursued an expansionary fiscal policy to maintain growth and social sector spending that led to pressure on consumer prices. A major challenge to increasing the absorptive capacity of the Nigerian economy is the dilapidated state of infrastructure, in  particular power, road transport and railways; and the overdependence of the economy on the oil and gas industry. These are priorities for the transformation agenda of the current administration and are being addressed through the creation of an enabling environment for private sector participation in infrastructure development, and through the development of the non-oil sector. In spite of the dominance of the oil sector, agriculture plays a significant role in the national economy, accounting for the largest single share of Gross Domestic Product (GDP). Sustainable growth in the agricultural sector is a principal factor in promoting inclusive economic growth, reducing poverty and ensuring the nation’s food security.

In spite of its robust growth the Nigerian economy has failed to generate decent jobs and poverty is widespread. The unemployment rate is currently 23.9% compared to 21.1% in 2010. The unemployment rate among the young is 37.7%, one of the highest in sub-Saharan Africa. Poverty is also very high and persistent. Social indicators in health and education remain weak.