The World Bank says it will take northern states 40 years to catch up with their southern counterparts considering the “current growth rates”.
The bank notes that low growth has deepened regional gaps with the mainstays of the northern economy – agriculture, solid minerals and manufacturing – not experiencing rapid growth in recent years.
The views are contained in Nigeria Country Economic Memorandum (CEM) the Bank released in Abuja yesterday, with participants joining online from different parts of the world.
The 72-page document entitled, ‘Charting a New Course’, describes the main trends and drivers of growth and job creation and covers 2000 to 2021. It also outlines the key challenges and opportunities to speed up growth and create jobs, synthesising findings from recent analyses, including challenges and prospects in selected areas; while presenting
policy options to sustain inclusive growth.
The report highlights the sharp gap between per capita levels of northern and southern states, saying, “the poverty rate is almost 20 times higher in Sokoto — the state with the highest poverty rate, at 87.7 per cent— compared to Lagos—the state with the lowest poverty rate, at 4.5 per cent” while quoting
2018/2019 data.
It notes that it will take the country about a decade to get back to per capita income level recorded pre-2014, that is, before the oil price shock that triggered the 2016 recession.
According to the document, a comprehensive report on the country’s socioeconomic indicators and detailed explanations of the trends says the modest economic gains recorded during the structural reforms of 2000 to 2010 were wiped in the following decade when the reforms were discontinued.
“Despite its vast natural resources and a young entrepreneurial population, development in Nigeria
has stagnated over the last decade and the country
is failing to keep up with the GDP growth of its
peers. Declining private investment and demographic
pressure push young Nigerians to pursue
opportunities overseas.
“Nigeria was a rising growth star globally in the
2000s due to the implementation of several
structural reforms in the context of rising oil prices.
Yet, this fast growth was not accompanied by robust
job creation.
“Between 2001 and 2010, Nigeria ranked among the
top 15 fastest growing economies in the world, with
an average annual growth rate of 8.2. However, the
hard-won income gains from the 2000s evaporated
between 2011 and 2021, due to the lack of deeper
structural reforms, global shocks, conflicting
macroeconomic policies, and increased insecurity
percent,” it argues.
Identifying job creation as a potent option for
accelerating poverty reduction and closing spatial
inequality, the report urges the government to
unlock the opportunities in private investment to
create quality and sustainable jobs.
“To catalyse private investment and offer more
opportunities to the youth, the priority is to restore
and preserve macroeconomic stability, which has
weakened in recent years due to conflicting
monetary policy goals, over-reliance on oil exports,
limited fiscal space and restrictive trade policies,” it
adds even as it admits that oil remains the country’s
economic “backbone.”
The CEM outlines policy options focused on
enhancing macroeconomic stability and an overall
business-enabling environment. Some of the
recommendations are improving the exchange rate
system, removing trade barriers, increasing non-oil
revenues and tackling inflation, which it said has
pushed an estimated eight million Nigerians into
poverty between 2020 and 2021.
It also calls for strengthening the rule of law and
social cohesion as well as enhancing the country’s
competitiveness by addressing key constraints to
private investment such as poor power supply,
protectionist trade regulations, poor access to
finance, and low digitalisation.
“While there is no silver bullet to accelerate growth,
Nigeria can become a rising growth star again if it
implements a comprehensive set of bold reforms in a
timely manner,” the report assures.
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