NigeriaNigeria

Change location . . .
Countries
  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burkina Faso
  • Burundi
  • Cameroon
  • Cape Verde
  • Central African Republic
  • Chad
  • Comoros
  • Côte d'Ivoire
  • DR Congo
  • Djibouti
  • Egypt
  • Equatorial Guinea
  • Eritrea
  • Eswatini
  • Ethiopia
  • Gabon
  • Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Kenya
  • Lesotho
  • Liberia
  • Libya
  • Madagascar
  • Malawi
  • Mali
  • Mauritania
  • Mauritius
  • Morocco
  • Mozambique
  • Namibia
  • Niger
  • Nigeria
  • Republic of the Congo
  • Rwanda
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Sierra Leone
  • Somalia
  • South Africa
  • South Sudan
  • Sudan
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe
Regions
  • Central Africa
  • East Africa
  • West Africa/ECOWAS
  • North Africa
  • Southern Africa
  • Sub-Saharan Africa
  • Africa
Regional Economic Communities
  • AMU
  • CEN-SAD
  • COMESA
  • EAC
  • ECCAS
  • IGAD
  • SADC
  • West Africa/ECOWAS
Income Groups
  • Low-income Africa
  • Lower middle-income Africa
  • Upper middle-income Africa
  • High-income Africa

Contact at AFI team is Kouassi Yeboua
This entry was last updated on 6 September 2022 using IFs v7.63.

In this entry, we first describe the Current Path forecast for Nigeria as it is expected to unfold to 2043, the end of the third ten-year implementation plan of the African Union's Agenda 2063 long-term vision for Africa.

The Current Path forecast is divided into summaries on demographics, economics, poverty, health/WaSH and climate change/energy. A second section then presents a single positive scenario for potential improvements in stability, demographics, health/WaSH, agriculture, education, manufacturing/transfers, leapfrogging, free trade, financial flows, infrastructure, governance and the impact of various scenarios on carbon emissions. With the individual impact of these sectors and dimensions having been considered, a final section presents the impact of the Combined Agenda 2063 scenario.

We generally review the impact of each scenario and the Combined Agenda 2063 scenario on gross domestic product per person and extreme poverty except for Health/WaSH that uses life expectancy and infant mortality.

The information is presented graphically and supported by brief interpretive text.

All US$ numbers are in 2017 values.

Summary

  • Current Path forecast
    • Nigeria is a member of the Economic Community of West African States(ECOWAS) and a key regional player in West Africa. The country is also the largest crude oil exporter and has the largest natural gas reserve on the continent. Jump to forecast: Current Path
    • In 2019, Nigeria had a population of 201 million. On the Current Path, it is forecast to be 388 million by 2043. At that point, Nigeria will be the third most populous country globally, after India and China. Jump to Demographics: Current Path
    • In 2019, the size of Nigeria's economy was US$560.7 billion, up from US$168.6 billion in 1990. By 2043, the economy is projected to have grown to about US$1.96 trillion. GDP per capita is projected to increase from about US$5 773 in 2019 to US$8 755 by 2043, slightly above the projected average of US$9 142 for lower middle-income countries in Africa by then. Jump to Economics: Current Path
    • At the US$3.20 poverty threshold, 75.5% of the Nigerian population was living in extreme poverty in 2019, equivalent to 153.7 million people. The rate of extreme poverty is forecast to decline to 60.2% by 2043, significantly higher than the average for lower middle-income countries in Africa, which will then be at 38.3%. The absolute number of poor people will stand at 233.4 million by 2043 owing to the rapid population growth. Jump to Poverty: Current Path
    • Carbon emissions increased from 10.7 million tons in 1990 to 39.3 million tons in 2019, and are forecast to reach 198 million tons by 2043. This represents an increase of approximately 400% between 2019 and 2043. Jump to Carbon emissions/Energy:Current Path
  • Sectoral scenarios
    • The Stability scenario improves security and stability in Nigeria. By 2043, Nigeria’s score on the IFs governance security index is forecast to be 0.84 in the Stability scenario, 13.5% higher than the Current Path forecast and 10% higher than the projected average of 0.74 for lower middle-income countries in Africa. Jump to Stability scenario
    • In 2019, the ratio of the working-age population to dependants in Nigeria stood at 1.2. On the Current Path it is forecast to be 1.4 by 2043. In the Demographic scenario, the ratio will be at 1.5 by 2043, which will be below the minimum of 1.7 required for the demographic dividend to materialise. Jump to Demographic Scenario
    • Life expectancy in Nigeria rose from 55 years in 1990 to 65 years in 2019, and is likely to reach 73 years by 2043 in the Current Path forecast. The Health/WaSH scenario improves life expectancy at birth to 74 years compared by 2043, which is slightly above the projected average for lower middle-income countries in Africa. Jump to Health/WaSH scenario
    • In the Agriculture scenario, crop yields improve from 5.6 tons per hectare in 2019 to 10.8 tons per hectare in 2043, compared with 7.5 tons in the Current Path forecast. In the Agriculture scenario, the average crop yield in Nigeria is projected to be 1.4 tons per hectare more by 2043 than the average of 6.1 tons per hectare for lower middle-income countries in Africa. Jump to Agriculture scenario
    • In the Education scenario, adult Nigerians are expected to have had 0.3 years more education by 2043 than in the Current Path forecast. Men are expected to have received 10 years of education by then, compared with 8.6 years for women. Jump to Education scenario
    • The Manufacturing/Transfers scenario points to Nigeria having 221.9 million people (57.3% of the population) living in extreme poverty by 2043, compared with 233.4 million people (60.2% of the population) in the Current Path forecast for that year. Jump to Manufacturing/Transfers scenario
    • In 2019, Nigeria had only 1.5 fixed broadband subscriptions per 100 people, compared with the average of 3.7 for lower middle-income countries in Africa. In the Leapfrogging scenario, the number of subscriptions increases to 45 per 100 people by 2043, which is 104% higher than in the Current Path forecast (24.4 per 100 people). Mobile broadband subscriptions are projected to increase from 27 per 100 people in 2019 to 144 per 100 people by 2043. Jump to Leapfrogging scenario
    • Nigeria’s trade deficit represented 6.1% of GDP in 2019. The trade deficit remains low across the forecast horizon of the Free Trade scenario, resulting in a trade surplus of 0.09% of GDP being project by 2043. Jump to Free Trade scenario
    • In the Financial Flows scenario, FDI flows to Nigeria represent about 3.6% of GDP by 2043, compared with 3.3% on the Current Path. Jump to Financial Flows scenario
    • In 2019, 54.6% of Nigeria’s rural population resided within 2 km from an all-weather road. This was below the average of 61.4% for lower middle-income African countries. In the Infrastructure scenario, it is projected to increase to 62.2% by 2043. Jump to Infrastructure scenario
    • The projected score for government effectiveness in the Governance scenario is 2.2 (out of a maximum of 5) by 2043. This is 4.7% higher than the projected score in the Current Path forecast in the same year. Jump to Governance scenario
    • The Free Trade and Manufacturing/Transfers scenarios will cause the biggest increase in carbon emissions in Nigeria across the forecast horizon. Jump to Impact of scenarios on carbon emissions
  • Combined Agenda 2063 scenario Jump to Combined Agenda 2063 scenario
    • By 2043, Nigeria will have a GDP of US$1.8 trillion in the Combined Agenda 2063 scenario.
    • GDP per capita will be US$14 857 in this scenario by 2043, US$6 102 more than the Current Path forecast for that year.
    • At the US$3.20 poverty threshold, the rate of extreme poverty declines to 35.9% (equating to 133.8 million people) by 2043, compared with 60.2% (233.4 million people) in the Current Path forecast.

All charts for Nigeria

Chart 1: Political map of Nigeria
Chart
Nigeria: Current Path forecast

Nigeria: Current Path forecast

This page provides an overview of the key characteristics of Nigeria along its likely (or Current Path) development trajectory. The Current Path forecast from the International Futures forecasting (IFs) platform is a dynamic scenario that imitates the continuation of current policies and environmental conditions. The Current Path is therefore in congruence with historical patterns and produces a series of dynamic forecasts endogenised in relationships across crucial global systems. We use 2019 as a standard reference year. The forecasts generally extend to 2043 to coincide with the end of the third ten-year implementation plan of the African Union's Agenda 2063 long-term development vision.

Nigeria is a lower middle-income country located in West Africa, sharing borders with Benin, Niger, Chad and Cameroon. Its southern border lies along the Gulf of Guinea, part of the Atlantic Ocean. Nigeria has a range of ecological regions, ranging from semi-deserts in the north to tropical rainforests in the south.

Nigeria is a member of the <Economic Community of West African States (ECOWAS)> and a key regional player in
West Africa. The country is a multi-ethnic and culturally diverse federation made up of 36 states and the Abuja Federal Capital Territory (FCT), grouped into six geopolitical zones (north-west, north-central, north-east, south-west, south-east and south-south). Recognised as Africa’s largest economy, Nigeria is also the largest crude oil exporter and has the largest natural gas reserve on the continent.

It is by far the most populous country in Africa and while some progress has been made in socio-economic terms in recent years, Nigeria faces serious social, economic and security challenges. The country has one of the highest number of people living in extreme poverty in the world (more than 80 million) and high youth unemployment levels. An overdependence on oil exports, deplorable infrastructure, human capital bottlenecks, low tax revenue mobilisation, deeply embedded corruption and decades of mismanagement have stymied investment, growth and the diversification of the economy.

Violence, criminality and other forms of insecurity have also worsened. In the north, violent extremism continues to destroy lives and livelihoods, while banditry has become an even deadlier threat. Separatists' agitations have also escalated into violent confrontations between the secessionists and security forces.

As Africa’s largest economy and most populous country, a stable and prosperous Nigeria is crucial for regional stability and faster poverty reduction in West Africa.

This report looks at the likely human and economic development trajectory in Nigeria (referred to as the Current Path). It also explores a series of policy interventions aimed at laying the foundations for long-term inclusive growth and development.

Chart 1: Political map of Nigeria
Chart
Demographics: Current Path

Demographics: Current Path

According to the 2018 Nigeria Demographic and Health Survey,[1NPC/Nigeria and ICF. Nigeria Demographic and Health Survey 2018, 2018] Nigeria’s population is made up of 46% Christians (constituting 10% Catholics and 36% Protestants) and 53.5% Muslims, with the remaining 0.5% being followers of traditional animist religions or not associating with any religion (atheists, agnostics).[2Data on religious affiliations of Nigeria’s population is limited, unreliable and contested; questions concerning religion are not integrated into the national census.] The country is home to over 250 different ethnic groups. This ethnic and religious diversity is often the source of tension, and religious affiliation contributes to shaping political and power dynamics in Nigeria.[3Berkley Center for Religion, Peace & World Affairs, The impact of ethnic and religious diversity on Nigeria’s development priorities, February 2020]

Nigeria is facing a significant population boom. From an estimated 45 million people at independence in 1960, the country’s population has more than quadrupled, to 201 million, by 2019. It is not only the most populous country in Africa, but also ranks seventh globally. On the Current Path, Nigeria’s population is likely to increase to about 388 million by 2043. At that point, the country will be the third most populous country globally, after India and China.

The fertility rate in Nigeria was 5.4 children per woman in 2020, a slight decline from 6.6 in 1990, putting it currently in eighth place globally. The Current Path forecast is that Nigeria’s fertility rate will decline to about 4 children per woman by 2043, which will make it the country with the highest fertility rate in the world.

Nigeria is among the countries with the most youthful age structure, with a median age of 18 in 2019. This means that half of the Nigerian population is younger than 18. On the Current Path, the median age is forecast to be 21.6 by 2043.

The youth bulge, defined as the ratio between the population aged 15–29 and the total adult population, was 47% in 2019, and it will remain above 40% across the Current Path forecast horizon. Although a large youth bulge can usher in youth activism and positive political changes in a country, it can also increase the likelihood of criminal violence, conflicts and instability, mainly when the needs of the youth, such as employment, cannot be met.

By 2019, about 43% of the population were younger than 15, while 3% were over 65. By 2043, the share of these two dependency age groups is projected to be 37% and 5%, respectively.

About 54% of the Nigerian population is between 15 and 64 years old, which constitutes the working-age group. This portion is forecast to increase to 58% by 2043. The structure of Nigeria’s population is typical of countries with a low life expectancy and high fertility rates.

The high population growth in Nigeria goes hand in hand with rapid urbanisation. In 2019, just over half (50.6%) of Nigerians lived in urban areas, up from less than a third (29.7%) in 1990. At 4.2%, the urbanisation rate in Nigeria is twice the world rate, and significantly higher than the Nigerian population growth rate of 3%.

By 2043, 62.8% of the population will be living in urban areas while the rural population will have dropped to 37.2% from 70.3% in 1990 and 49.46% in 2019.

This rapid urbanisation comes with immense challenges, such as unemployment, poverty, inadequate health infrastructure, poor sanitation, urban slums and environmental degradation. However, it also offers Nigerian policymakers an opportunity to structurally transform the economy, as good urban planning could foster an inclusive economy by improving service delivery and reducing urban poverty.

The population is unevenly distributed across the country, being concentrated along trade routes and locations with rich natural resources. Average density ranges from five people per hectare in rural areas to 45 people per hectare in urban spaces. The highest rural densities are found in the southwest, while the highest urban densities are located in the cities of Lagos, Kano, Ibadan, Kaduna, Port Harcourt, Benin City and Maiduguri.

The density of Nigeria's population amounted to five inhabitants per hectare in 2019, far above the average of less than one per hectare for lower middle-income countries in Africa. The population density is forecast to increase to about 11 inhabitants per hectare by 2043.

Chart 4: Population density map for 2019
Chart
Economics: Current Path

Economics: Current Path

At independence, Nigeria’s economy showed great promise, with agriculture as its backbone. The country adopted import substitution as an industrialisation policy to produce most goods locally. However, the discovery of crude oil in commercial quantities changed the course of Nigeria’s economy and extracting and exporting crude oil became the dominant economic activity. The abundance of petrodollars made it easier to import various goods and services. As a result, advances in agriculture and manufacturing were neglected and these sectors have become less competitive over time.[4The Africa Report, Nigeria at 60] Today, Nigerian exports remain undiversified; the economy is highly dependent on crude oil, which accounts for more than 80% of total exports, half of government revenues and the bulk of hard currency earnings.[5World Bank Group, Nigeria overview, 2020]

Since the shift from agriculture to crude oil and gas in the late 1960s, Nigeria’s economic growth has been driven by the oil price boom-bust cycles. Thus, the country has, over time, recorded volatile growth, but little on average. After recording an average growth rate of 7% between 2000 and 2014, a sharp drop in oil prices from mid 2014 to 2016 saw the Nigerian economy fall into a recession. The growth rate fell from 6.3% in 2014 to 2.7% in 2015 and –1.6% in 2016, which led to a budgetary crisis. The economy was slowly recovering from the 2016 recession — with the growth rate rebounding to 0.8% in 2017, 1.9% in 2018 and 2.2% in 2019 — when the COVID-19 pandemic struck. With the collapse of commodity prices associated with the COVID-19 crisis, the economy contracted by 1.8% in 2020, albeit less than the projected contraction of –3.2% at the start of the pandemic.

Nigeria’s economy is projected to have grown to US$1.96 trillion by 2043, up from US$560 billion in 2019. Under the Current Path assumptions Nigeria will continue to have the largest economy in Africa across the forecast horizon.

Although many of the charts in the sectoral scenarios also include GDP per capita, this overview is an essential point of departure for interpreting the general economic outlook of Nigeria.

Nigeria has the largest GDP in Africa; however, in 2019, it ranked 16th out of Africa’s 54 countries with regard to GDP per capita. The country’s inability to sustain economic growth and the rapid population growth depress per capita income growth. On the Current Path, Nigeria’s GDP per capita is projected to increase from about US$5 773 in 2019 to US$8 755 by 2043, slightly above the projected average of US$9 142 for lower middle-income Africa in the same year. The over-reliance on crude oil, policy missteps, corruption and bad governance have impeded economic development in Nigeria. To put this in perspective: Malaysia, which was as poor as Nigeria in the 1960s, today has a GDP per capita about five times that of Nigeria.

Owing to the country’s jobless oil-driven growth, the informal sector has become the lifeblood of millions of Nigerians.

According to the World Bank, a 1% increase in economic growth leads to only a 0.1% increase in employment in Nigeria,[6World Bank, More, and more productive, jobs for Nigeria: A profile of work and workers, 2016] and recent estimates from the International Labour Organization (ILO) show that 93% of all employment in Nigeria is informal, with 95% of women working in the informal sector compared with 90% of men.[7International Labour Organization O, Women and men in the informal economy: A statistical picture, 2018]

In 2019, the size of the informal economy was equivalent to 39.3% of the country's GDP, and by 2043 it is projected to have declined modestly to 33.2%, above the projected average of 26.4% of GDP for lower middle-income countries in Africa.

This projected decline in the size of the informal economy augurs well for government revenue. Owing to weak tax administration, corruption, high levels of non-compliance, and the large informal sector, Nigeria has one of the world’s lowest tax revenues-to-GDP ratios, leaving little fiscal space for productive expenditure.

Although the informal economy provides a safety net for a large and growing working-age population in the country, it impedes economic growth. Reducing informality will allow more people to benefit from better wages and redistributive measures. Therefore, Nigerian authorities need to take steps to reduce the size of the informal economy by reducing the hurdles to registering a business, tackling corruption and improving access to finance.

The IFs platform uses data from the Global Trade and Analysis Project (GTAP) to classify economic activity into six sectors: agriculture, energy, materials (including mining), manufactures, services and information and communications technology (ICT). Most other sources use a threefold distinction between only agriculture, industry and services, with the result that data may differ.

The service sector dominates the Nigerian economy and consists of several industries, such as banking, retail and wholesale trade, tourism, real estate, motion pictures (Nollywood), telecommunications and entertainment. With over 2 500 movies produced annually, the booming Nollywood is the world’s second largest film industry in terms of output and contributes around 2% to Nigeria’s GDP.[8Premium Times, Nollywood contributes 2.3% to Nigeria’s GDP – Gbajabiamila, 16 April 2021] However, owing to sluggish growth in the non-oil sector, oil and gas, which account for less than 10% of GDP, determine economic growth and contributes to over 90% of export earnings and more than half of government revenue.

In 2019, the service sector accounted for 54% of GDP (US$302.9 billion). On the Current Path, the share of the service sector towards GDP will increase slightly by 2043, to 62.1% (US$1.2 trillion). At 22.5% (US$126.2 billion) in 2019, agriculture was the second most significant contributor to Nigeria’s GDP.

Agriculture is followed by the manufacturing industry and the energy sector (mainly oil and gas), which accounted for about 9% of GDP each in 2019. On the Current Path, manufacturing’s share towards GDP is forecast to be 18.9% (US$372.9 billion) by 2043. The share of agriculture is forecast to decline from 22.5% in 2019 to 7.5% by 2043, reflecting the structural transformation of the economy.

The data on agricultural production and demand in the IFs forecasting platform initializes from data provided on food balances by the Food and Agriculture Organization (FAO). IFs contains data on numerous types of agriculture but aggregates its forecast into crops, meat and fish, presented in million metric tons. Chart 9 shows agricultural production and demand as a total of all three categories.

Nigeria is a country with great agricultural potential, yet cycles of inadequate financial investment, poor land-use management, slow adaptation to climate change and the slow adoption of new technologies have left the sector unable to meet the nutritional demands of a rapidly growing population. Nigeria has about 71 million hectares of agricultural land, with the major crops being maize, cassava, guinea corn, yam beans, millet and rice.[9Food and Agricultural Organization of the United Nations, Nigeria at a glance] The current crop yields of 5.7 metric tons per hectare, placing Nigeria in ninth position on the continent, are unable to meet the growing domestic demand. For example, only 57% of the 6.7 million metric tons of rice that is consumed annually in the country are produced locally.[10Food and Agricultural Organization of the United Nations, Nigeria at a glance]

Despite its gradual decline, the agriculture sector remains vital for the Nigerian economy and its people. It is the main source of livelihoods for the majority of rural Nigerians.

In 2019, agricultural production stood at 212.8 million metric tons, up from 76.14 million metric tons in 1990. This is lower than the demand of 231.2 million metric tons in 2019. Across the Current Path forecast horizon, the excess demand will continue to increase. Agricultural demand is set to increase to 494.3 million metric tons by 2043, while local production is likely to reach only 282.4 million metric tons by 2043, resulting in a significant deficit (about 75% of total demand) by 2043. This will substantially increase the import bill, with further pressure on foreign reserves and the exchange rate. With the rapidly growing population, estimated to reach nearly 400 million by 2043, enhancing agricultural productivity through adopting new technologies and innovations as well as practising climate-smart agriculture will be crucial to ensure food security and nutrition in Nigeria.

Poverty: Current Path

Poverty: Current Path

There are numerous methodologies and approaches to defining poverty. We measure income poverty and use GDP per capita as a proxy. In 2015, the World Bank adopted the measure of US$1.90 per person a day (in 2011 international prices), also used to measure progress towards the achievement of Sustainable Development Goal 1 of eradicating extreme poverty. To account for extreme poverty in richer countries occurring at slightly higher levels of income than in poor countries, the World Bank introduced three additional poverty lines in 2017:

  • US$3.20 for lower middle-income countries
  • US$5.50 for upper middle-income countries
  • US$22.70 for high-income countries.

As in many other sub-Saharan African countries, poverty in Nigeria presents a paradox: the country is resource rich, but most people are poor. Bad governance, corruption, unemployment and inequality are some of the key drivers of poverty in Nigeria. Poverty rates have declined more slowly in Nigeria than in other sub-Saharan African countries with similar per capita GDP growth because of the ineffectiveness of poverty alleviation programmes, in part due to corruption.[11OC Iheonu and NE Urama, Addressing poverty challenges in Nigeria, AfriHeritage Policy Brief No. 21, July 2019.]

At the US$3.20 poverty threshold for lower middle-income countries, 75.5% of Nigeria’s population were living in extreme poverty in 2019, equivalent to 153.7 million people. This is 25.5 percentage points above the average (about 50%) for lower middle-income countries in Africa. The poverty rate increased to 78% in 2020 owing to the COVID-19 pandemic and its associated economic slowdown.

Nigeria’s poverty level is forecast to decline gradually, to 60.2% by 2043, which is significantly higher than the average of 38.3% expected for lower middle-income countries in Africa by then. However, the absolute number of poor people will continue to increase, to 233.4 million by 2043, because of rapid population growth. Nigeria’s poor population resides mostly in rural areas, is predominantly female, mostly illiterate and part of the informal sector.

To ensure peace and stability in the country, proactive measures need to be taken to break the cycle of poverty. The government should scale up social safety net transfers to a broader share of the poor, reduce corruption and invest radically in youth education and employment.

Carbon Emissions/Energy: Current Path

Carbon Emissions/Energy: Current Path

The IFs platform forecasts six types of energy, namely oil, gas, coal, hydro, nuclear and other renewables. To allow comparisons between different types of energy, the data is converted into billion barrels of oil equivalent (BOE). The energy contained in a barrel of oil is approximately 5.8 million British thermal units (MBTUs) or 1 700 kilowatt-hours (kWh) of energy.

Nigeria is endowed with large oil, gas, hydro, solar, geothermal and biomass resources. According to the International Energy Agency (IEA), Nigeria has 15% and 16% of Africa’s oil and gas reserves, respectively,[12International Energy Agency, World Energy Outlook, 2019] yet the country has one of the highest rates of energy poverty in the world.

In 2019, oil and gas accounted for 66% and 33% of energy production in the country and this reliance on oil and gas is forecast to continue across the current path forecast horizon.

By 2043 gas will represent 49% of total energy production, while the share of oil will have dropped to 45%. Hydropower will account for only 1% in the same year.

Carbon is released in many ways, but the three most important contributors to greenhouse gases are carbon dioxide (CO2), carbon monoxide (CO) and methane (CH4). Since each has a different molecular weight, IFs uses carbon. Many other sites and calculations use CO2 equivalent.

Carbon emissions increased from 10.7 million tons in 1990 to 39.3 million tons in 2019 and are forecast to reach 198 million tons by 2043. This represents an increase of 400% between 2019 and 2043, although only about 2% of global carbon emissions. The increased level of emissions is due to increased economic activity in Nigeria.

Developed economies should help developing countries such as Nigeria deal with the impact of climate change, which will disproportionately affect them.

Stability scenario

Stability scenario

The Stability scenario represents reasonable but ambitious reductions in risk of regime instability and lower levels of internal conflict. Stability is generally a prerequisite for other aspects of development and this would encourage inflows of foreign direct investment (FDI) and improve business confidence. Better governance through the accountability that follows substantive democracy is modelled separately.

The intervention is explained here in the thematic part of the website.

Nigeria began its democratic transition only in 1999. Except for two short periods of civilian rule (1960–1966 and 1979–1983), the four decades since Nigeria’s independence were marked by a succession of military regimes that came to power through coups d’état.

Nigeria is facing multiple security threats, including insurgencies, terror acts, kidnappings, armed robberies and communal clashes. In addition to this, multidimensional violence and separatist agitations threaten unity and stability of the country.

The IFs governance security index ranges from 0 (low security) to 1 (high security). Nigeria scored 0.68 on the index, compared with the average of 0.72 for lower middle-income Africa in 2019. The Stability scenario improves security and stability in the country and the score is expected to be 0.84 by 2043, 13.5% higher than the Current Path forecast and 10% higher than the projected average of 0.76 for lower middle-income Africa.

The war in Ethiopia has shown how instability can imperil an impressive economic growth record. Ethiopia's case demonstrates that a state's capacity to maintain order is one of the most important conditions for development. The government and policymakers in Nigeria should take proactive measures to improve social and political stability in the country.

By 2033, Nigeria's GDP per capita is expected to be US$92 higher in the Stability scenario than in the Current Path forecast for that year. By 2043, the difference would increase to about US$323. Hence, by 2043, Nigeria would record a GDP per capita of US$9 078, 3.7% above the Current Path forecast of US$8 755, but US$64 below the projected average of US$9 142 for lower middle-income African countries under Current Path assumptions.

Socio-political stability in a country encourages greater domestic and foreign investment, positively affecting income per capita growth.

Stability in a country is an important condition for economic growth and poverty reduction. At the poverty threshold of US$3.20 for lower middle-income countries, 153.7 million Nigerians (75.5% of the population) were considered to be extremely poor in 2019. The number of poor people will stand at 227 million (58.7%) by 2043 in the Stability scenario, compared with 233 million (60.2%) in the Current Path forecast for that year. The projected poverty rate in the Stability scenario in 2043 is about 20 percentage points above the expected average of 38.3% for lower middle-income countries in Africa.

Demographic scenario

Demographic scenario

This section presents the impact of a Demographic scenario that aims to hasten and increase the demographic dividend through reasonable but ambitious reductions in the communicable-disease burden for children under five, the maternal mortality ratio and increased access to modern contraception.

The intervention is explained here in the thematic part of the website.

Demographers typically differentiate between a first, second and even a third demographic dividend. We focus here on the first dividend, namely the contribution of the size and quality of the labour force to incomes. It refers to a window of opportunity that opens when the ratio of the working-age population (between 15 and 64 years of age) to dependants (children and the elderly) reaches 1.7.

An increase in the working-age population relative to dependent children and elders can generate economic growth known as the demographic dividend. Generally, the demographic dividend materialises when a country reaches a ratio of at least 1.7 people of working age for each dependent.[13Berlin Institute for Population and Development, Demographic dividend] When there are fewer dependents to take care of, it frees up resources for investment in both physical and human capital formation, and eventually increases female labour force participation. Studies have shown that about a third of the economic growth during the East Asia economic miracle can be attributed to the large worker bulge and a relatively small number of dependants.[14D Canning, S Raja and AS Yazbeck (eds.), Africa’s demographic transition: Dividend or disaster? Africa Development Forum Series, Washington, DC: World Bank, 2015.]

In 2019, the ratio of the working-age population to dependants in Nigeria stood at 1.2, meaning that there were 1.2 people of working age population for each dependant. On the Current Path, the ratio is forecast to be 1.4 by 2043; in the Demographic scenario it is set to be at 1.5 by then. This will be below the minimum of 1.7 required for the demographic dividend to materialise. Even in the Demographic scenario, Nigeria is not likely to reap the benefit of this increase in the ratio between the working-age population and dependants across the forecast horizon.

Better management of population growth is key to the development of a nation. Policymakers in Nigeria need to take urgent action to address the high population growth in order to speed up the country’s demographic transition.

The infant mortality rate is the number of infant deaths per 1 000 live births and is an important marker of the overall quality of the health system in a country.

As of 2019, the infant mortality rate in Nigeria was 68 deaths per 1 000 live births, above the average of 46 for Africa’s lower middle-income countries. By 2043. the infant mortality rate is expected to be at 33 deaths per 1 000 live births in the Demographic scenario (compared with 41 in the Current Path forecast). This will be about 3 percentage points above the average for lower middle-income countries in Africa, for which the average would then be at 29.7 deaths per 1 000 live births.

The Demographic scenario's impact on per capita income is marginal: approximately US$36 more than the Current Path forecast’s US$6 723 in 2033 and US$202 more than the Current Path forecast of US$8 755 by 2043. This represents an improvement of 2.3% over the Current Path forecast in that year. This will be about 2% lower than the projected average of US$9 142 for lower middle-income countries in Africa by 2043.

At the poverty threshold of US$3.20 for lower middle-income countries, 153.7 million Nigerians (75.5% of the population) were considered to be extremely poor in 2019. The number of poor people will stand at about 224 million (59.4% of the population) by 2043 in the Demographic scenario, compared with 233.4 million (60.2% of the population) in the Current Path forecast for that year. The poverty rate fo4 2043 is about 22 percentage points above the projected average for Africa’s lower middle-income countries in the Demographic scenario. Nigerian authorities should make efforts to accelerate the demographic transition, which can be a source of growth and poverty reduction.

Health/WaSH scenario

Health/WaSH scenario

This section presents reasonable but ambitious improvements in the Health/WaSH scenario, which include reductions in the mortality rate associated with both communicable diseases (e.g. AIDS, diarrhoea, malaria and respiratory infections) and non-communicable diseases (NCDs) (e.g. diabetes), as well as improvements in access to safe water and better sanitation. The acronym WaSH stands for water, sanitation and hygiene.

The intervention is explained here in the thematic part of the website.

The public health sector in Nigeria is incapacitated by a combination of mismanagement, corruption and funding shortfall. As a result, Nigeria has some of the worst healthcare statistics in the world.

Life expectancy in Nigeria rose from 55 years in 1990 to 65 years in 2019, and in the Current Path scenario is likely to reach 73 years by 2043, on par with the projected average for its income peers in Africa.

In the Health/WaSH scenario life expectancy at birth is 74 years by 2043, slightly above the projected average for lower middle-income countries in Africa (73.3 years).

On the average, women had a higher life expectancy at birth (66 years) than men (63.5 years) in 2019. In the Health/WaSH scenario, life expectancy at birth for women is projected to be 76.2 years by 2043, compared with 72.6 years for men.

In 2019, Nigeria’s infant mortality ranked as the highest among lower middle-income countries in Africa, with 67 deaths per 1 000 live births. The Health/WaSH scenario reduces infant mortality to 35 deaths per 1 000 live births by 2043, which is lower than the 41 deaths per 1 000 live births projected in the Current Path forecast.

The infant mortality rate in the scenario is slightly above the average (30 per 1 000 live births) expected for lower middle-income countries in Africa by 2043.

Agriculture scenario

Agriculture scenario

The Agriculture scenario represents reasonable but ambitious increases in yields per hectare (reflecting better management and seed and fertiliser technology), increased land under irrigation and reduced loss and waste. Where appropriate, it includes an increase in calorie consumption, reflecting the prioritisation of food self-sufficiency above food exports as a desirable policy objective.

The intervention is explained here in the thematic part of the website.

The data on yield per hectare (in metric tons) is for crops but does not distinguish between different categories of crops.

The agriculture sector in Nigeria is characterised by slow adoption of modern technologies and low productivity. It is largely dependent on rain and thus highly vulnerable to rainfall variability amidst low irrigation capacity. The average fertiliser usage of 7.3 kg/ha is significantly below the recommended optimal average of 400 kg/ha.[15National fertiliser quality control bill factbook, Nigeria] Current agriculture development plans in the country aspire to achieve food security, reduce post-harvest losses and increase agricultural yields.

In the Agriculture scenario, crop yields improve from 5.6 tons per hectare in 2019 to 10.8 tons per hectare in 2043, compared with 7.5 tons in the Current Path forecast in the same year. In 2043, the average crop yield in the Agriculture scenario is 1.4 tons per hectare more than the projected average of 6.1 tons per hectare for lower middle-income countries in Africa.

Owing to low yields, population growth and diet preferences, Nigeria's import bill for foodstuffs is increasing. For instance, in 2021, the Federal Government spent US$2.71 billion on food imports, an increase of 44.9% compared with the level in 2020.[16S Tunji, Food import bill jumps by 45% to N1.12tn– CBN report, Punch, 14 April 2022] Improvements in the agriculture sector could help reverse this trend.

On the Current Path, food import dependence will continue to increase: from 8.1% of total food demand in 2019 to 43.5% by 2043. However, in the Agriculture scenario, the food import dependence significantly declines and is forecast to be about 17.6% of total food demand in 2043, lower than the projected average of 36.8% for lower middle-income African countries.

The materialisation of the Agriculture scenario would lead to a reduction in imports and release funds for other productive investments in the economy. It would also improve the country's current account balance and make it less vulnerable to international food prices shocks.

The agriculture sector is one of the main pillars of the Nigerian economy, as it employs more than half of the total labour force in the country. Given the sector’s importance, improvements would promote rural employment, economic growth and raise income levels.

The Agriculture scenario significantly impacts GDP per capita in the country. By 2043, the Agriculture scenario improves GDP per capita by US$568 above the Current Path forecast, which means that Nigerians will be earning, on average, US$9 323 per year. This is US$181 higher than the projected average of US$9 142 for lower middle-income countries in Africa.

At the US$3.20 threshold, the poverty rate in the Agriculture scenario is about 56.3% by 2043, compared with 75.5% in the Current Path forecast. This is equivalent to 15.6 million fewer people living in extreme poverty by then in this scenario.

As more than 50% of the labour force in Nigeria relies on crops to feed their families and earn an income, further development in the agriculture sector is a viable option to significantly reduce poverty in the country.

Education scenario

Education scenario

The Education scenario represents reasonable but ambitious improved intake, transition and graduation rates from primary to tertiary levels and better quality of education. It also models substantive progress towards gender parity at all levels, additional vocational training at secondary school level and increases in the share of science and engineering graduates.

The intervention is explained here in the thematic part of the website.

The education sector has not received enough attention in Nigeria, and this manifests in the chronically low public funding, decaying educational infrastructure, deteriorating teaching capabilities and high illiteracy, among other issues. The national literacy rate improved modestly from 55% in 2003 to about 65% in 2019, 10 percentage points below the average for lower middle-income Africa.

The mean years of education of adults (aged 15 years and older) is a good indicator of the general level of education or the stock of education in a country. In 2019, Nigerian adults had received 8.2 years of education, and on the Current Path, it is projected to improve to 9 years by 2043. This is 0.5 years below the average for lower middle-income countries in Africa. Technically, this means that most Nigerian will have at least basic education by 2043.

In the Education scenario, the mean years of education improves only by 0.3 years above the Current Path forecast in 2043.

When disaggregated by gender, men had about 9 years and women 7 years of schooling in 2019. In the Education scenario, mean years of education for men is forecast to be 10 years compared with 8.6 years for women by 2043. If the Education scenario were to materialise, the gender gap in education would therefore decrease.

In addition to an alarming number of out-of-school children, the quality of education received by those who do have the opportunity to be in school has slipped significantly. Getting more children into school is essential, but ensuring that they actually learn is more important.

According to the Nobel Prize winner in economics, Robert Lucas and the former World Bank's chief economist, Paul Romer, economic development depends above all on a country's ability to value its human capital. It allows not only the country to increase its current added value but also to create tomorrow's technological innovations.

High-quality and equitable education is therefore paramount to economic development. In the Education scenario, the score for the quality of primary education improves from 34.4 in 2019 to 40.5 in 2043, a 16% increase compared with the Current Path forecast.

The score for the quality of secondary education goes from 42.9 in 2019 to 46.1 in 2043 in this scenario, a 7.4 % improvement compared with the Current Path forecast for 2043. These findings also show that the quality of education in Nigeria is better at secondary level than at primary level.

By 2043, the Education scenario will increase GDP per capita by US$329 from the expected US$8 755 in the Current Path forecast. In other words, in 2043, GDP per capita in the Education scenario will be 3.7% more than in the Current Path forecast.

Investment in education significantly impacts economic growth, but it takes time to materialise. It will take more than a decade for a child enrolled in primary school to contribute meaningfully to the economy. Investment in human capital affects labour productivity with a long lag, so it can take more than 15 years until output surpasses its counterpart in a programme that invests mainly in infrastructure.[17African Development Bank, African Economic Outlook 2021]

Education is an important tool to reduce poverty. It improves the employment and income prospects of the poor segment of society.

At the US$3.20 threshold, the Education scenario will result in a poverty rate of 58.3% (225.4 million people) by 2043, compared with 75.5% (233.4 million people) in the Current Path forecast. This means that 8 million fewer people will be living in poverty in the Education scenario than in the Current Path forecast by 2043.

Manufacturing/transfers scenario

Manufacturing/transfers scenario

The Manufacturing/Transfers scenario represents reasonable but ambitious manufacturing growth through greater investment in the economy, investments in research and development, and promotion of the export of manufactured goods. It is accompanied by an increase in welfare transfers (social grants) to moderate the initial increases in inequality that are typically associated with a manufacturing transition. To this end, the scenario improves tax administration and increases government revenues.

The intervention is explained here in the thematic part of the website.

Chart 30 should be read with Chart 8, which presents a stacked area graph on the contribution to GDP and size, in billion US$, of the Current Path economy for each of the sectors.

In this scenario, the share of manufacturing in GDP (%) records the highest improvement compared with the Current Path. In 2043, its share towards GDP is 0.9 percentage points larger than in the Current Path forecast. However, the agriculture and energy sectors’ share towards GDP are 0.74 and 0.28 percentage points lower, respectively, than according to the Current Path forecast.

In absolute terms, the service sector’s contribution will be US$147.2 billion larger than in the Current Path forecast by 2043, which represents the largest improvement in contribution to GDP. This is followed by the manufacturing industry, with its value in the scenario being US$63.9 billion larger than in the Current Path forecast by 2043.

Going forward, the service sector will continue to dominate the Nigerian economy.

Compared with the Current Path forecast, the Manufacturing/Transfers scenario increases household transfers and welfare by 46.8% by 2043, US$21.2 billion more than the Current Path’s forecast of US$45.3 billion.

These transfers will be needed to address the initial increase in poverty that is often associated with investment in the manufacturing sector. Industrialisation is often funded by an initial crunch in consumption, which increases poverty in the first few years. However, these efforts stimulate inclusive growth with a greater impact on poverty alleviation in the long term.

To make the social safety net programmes more effective at reducing poverty, better targeting and efficient approaches are critical.

Manufacturing is the engine of economic growth (Kaldor's engine of growth hypothesis). It has backward and forward linkages with other sectors and transforms the productivity structures across the economy. Thus, a robust manufacturing sector is crucial to achieve sustained growth and significantly improve the population's living standard.

In the Manufacturing/Transfers scenario, GDP per capita will be US$206 more by 2033 than the US$6 723 in the Current Path. By 2043, GDP per capita is expected to increase to US$9 463 in the scenario, compared with US$8 755 in the Current Path forecast. This is an increase of 8.1% (US$708) from the Current Path forecast for that year.

At the US$3.20 threshold, 153.7 million Nigerians (75.5% of the population) were considered to be extremely poor in 2019. The number of poor people will stand at 221.9 million (57.3% of the population) by 2043 in the Manufacturing/Transfers scenario, compared with 233.4 million (60.2% of the population) in the Current Path forecast for that year. The poverty rate in the Manufacturing/Transfers scenario in 2043 is about 19 percentage points above the projected average of 38.3% for African lower middle-income countries.

Leapfrogging scenario

Leapfrogging scenario

The Leapfrogging scenario represents a reasonable but ambitious adoption of and investment in renewable energy technologies, resulting in better access to electricity in urban and rural areas. The scenario includes accelerated access to mobile and fixed broadband and the adoption of modern technology that improves government efficiency and allows for the more rapid formalisation of the informal sector.

The intervention is explained here in the thematic part of the website.

Fixed broadband includes cable modem Internet connections, DSL Internet connections of at least 256 KB/s, fibre and other fixed broadband technology connections (such as satellite broadband Internet, ethernet local area networks, fixed-wireless access, wireless local area networks, WiMAX, etc.).

ICT connectivity has been growing in Nigeria in recent years, with continued effort to promote competition in the sector. Thus, the country has the largest mobile telecom market in Africa, although it is subject to erratic electricity supply and vandalism of infrastructure.[18Central Intelligence Agency, CIA Factbook] However, Nigeria still has a long way to go to achieve widespread use of Internet (broadband) owing to infrastructural bottlenecks, particularly in rural areas.

In 2017, Nigeria ranked 143rd out of 176 countries on the International Telecommunication Union’s ICT Development Index, which is a composite index used to monitor and compare ICT development in countries.[19International Telecommunications Union, ICT Development Index, 2017] Nigeria’s poor ranking reflects its low number of broadband subscriptions (fixed and mobile).

Nigeria had 1.5 fixed broadband subscriptions per 100 people in 2019, compared with the average of 3.7 for lower middle-income countries in Africa. In the Leapfrogging scenario, fixed broadband subscriptions increase to 45 per 100 people by 2043, which is more than double the Current Path forecast of 22 per 100 people in by then.

Mobile broadband refers to wireless Internet access delivered through cellular towers to computers and other digital devices.

In contrast to fixed broadband, the use of mobile broadband has grown rapidly in Nigeria. Overall, about 42% of Nigerians use the Internet and mostly via mobile networks.[20Kouassi Yeboua, Jakkie Cilliers and Alize le Roux, Nigeria in 2050: Major player in the global economy or poverty capital?, ISS West Africa Report No.37, 2022.]

In 2019, mobile broadband subscriptions stood at 27.1 per 100 people. This was significantly below the average for lower middle-income Africa (at 49 subscriptions per 100 people).

In the Leapfrogging scenario, mobile broadband subscriptions in the country are expected to be at 144.1 per 100 people by 2043, converging with the Current Path forecast. It will be slightly below the average of 147.6 for lower middle-income countries in Africa.

Widespread access to high-speed Internet can improve a country's socio-economic outcomes. Broadband can increase productivity, reduce transaction costs and optimise supply chains, positively affecting economic growth. A study by the World Bank revealed that a 10% increase in broadband penetration in developing countries leads to a 1.4% increase in GDP.[21CZ Qiang and CM Rossotto, Economic impacts of broadband, in Information and communications for development 2009: Extending reach and increasing impact, Washington DC: World Bank, 2009, 35–50.] Nigerian authorities should accelerate the implementation of their National Broadband Plan to increase broadband penetration.

In 2019, 107.4 million Nigerians had access to electricity, representing 52.7% of the total population. This is significantly below the average of 66.3% for lower middle-income countries in Africa.

Also, access to electricity in the country is skewed toward the urban areas. In 2019, about 76% of the urban population had access to electricity, compared with only 29.4% in rural areas.

Access to reliable electricity is critical to economic growth and improvements in livelihoods. However, in Nigeria, getting connected to the national grid does not necessarily mean access to reliable electricity supply. Power cuts are the key feature of electricity supply in Nigeria, and as a result the country is the largest importer of electric generators in Africa.

In the Leapfrogging scenario, about 87.8% of the Nigerian population (340 million people) will have access to electricity by 2043. This is above the projected average of 81.7% for lower middle-income countries in Africa. It is also roughly ten percentage points higher than the Current Path forecast of 76.2% (295.3 million people).

By 2043, 92.5% of people residing in urban centres will have access to electricity in the Leapfrogging scenario, compared with 86% in the Current Path forecast.

By 2043, 80% of the rural population is expected to have access to electricity in the Leapfrogging scenario, compared with 59.8% on the Current Path in the same year.

Widespread access to electricity and high-speed Internet can improve a country's socio-economic outcomes. Broadband, for instance, can increase productivity, reduce transaction costs and optimise supply chains, positively affecting economic growth.

By 2033, GDP per capita will be at US$6 947 in the Leapfrogging scenario, compared with US$6 723 in the Current Path forecast, a difference of US$224. By 2043, the difference will be US$604 from the Current Path forecast of US$8 755.

The expected Leapfrogging GDP per capita (US$9 359) in 2043 will be US$217 above the projected average of US$9 142 for lower middle-income countries in Africa.

In the Leapfrogging scenario, 221.6 million people will be living in extreme poverty by 2043, representing 57.3% of the population. This is 11.8 million fewer poor people than in the Current Path forecast for the same year. In the Leapfrogging scenario, the poverty rate is about 19 percentage points above the projected average for Africa’s lower middle-income countries by 2043.

Free Trade scenario

Free Trade scenario

The Free Trade scenario represents the impact of the full implementation of the African Continental Free Trade Area (AfCFTA) by 2034 through increases in exports, improved productivity and increased trade and economic freedom.

The intervention is explained here in the thematic part of the website.

The trade balance is the difference between the value of a country's exports and its imports. A country that imports more goods and services than it exports in terms of value has a trade deficit, while a country that exports more goods and services than it imports has a trade surplus.

Nigeria’s export basket is dominated by hydrocarbons (oil and gas), making the country’s current account balance vulnerable to volatile commodity prices. Like many African countries, Nigeria mainly exports crude oil and gas and imports manufactured goods and refined petroleum.

The trade deficit of Nigeria was equivalent to 6.1% of GDP in 2019, 0.5 percentage points below the average for lower middle-income countries in Africa in the same year.

Across the forecast horizon, Nigeria is expected to generally record a trade deficit, in both the Current Path forecast and the Free Trade scenario. However, the trade deficit in the Free Trade scenario is much lower than in the Current Path forecast. Thus, in 2043, Nigeria will record a small trade surplus of 0.09% of GDP, compared with a deficit of 5.5% of GDP in the Current Path forecast.

In the Current Path forecast, GDP per capita increases from US$5 773 in 2019 to US$8 755 in 2043. It is expected to be US$9 810 in the Free Trade scenario, US$1 055 more than in the Current Path forecast for that year. This shows that the full implementation of the AfCFTA will significantly enhance economic growth in Nigeria. Trade openness increases technology diffusion and competition with a positive effect on productivity and economic growth.

Trade openness will reduce poverty in the long term, although initially increasing it owing to the redistributive effects of trade. Most African countries export primary commodities and low-tech manufacturing products, and therefore a continental free trade agreement that reduces tariffs and non-tariff barriers will increase competition among countries in primary commodities and low-tech manufacturing exports. Countries with inefficient, high-cost manufacturing sectors might be displaced as the AfCFTA is implemented, thereby pushing up poverty rates. In the long term, as the economy adjusts and produces and exports its comparatively advantaged (lower relative cost) goods and services, poverty rates will decline.

In 2043, the poverty rate, measured at $3.20, will be 56.4% in the Free Trade scenario. This is equivalent to 15.2 million fewer poor people than on the Current Path. The poverty rate in the Free Trade scenario is significantly lower than the Current Path’s forecast of 60.2%, but above the average of 38.3% for lower middle-income countries in Africa. The full implementation of the AfCFTA will improve economic growth and income and reduce poverty in Nigeria. 

Financial Flows scenario

Financial Flows scenario

The Financial Flows scenario represents a reasonable but ambitious increase in worker remittances and aid flows to poor countries and an increase in the stock of foreign direct investment (FDI) and additional portfolio investment inflows to middle-income countries. We also reduced outward financial flows to emulate a reduction in illicit financial outflows.

The intervention is explained here in the thematic part of the website.

Many countries in sub-Saharan Africa are still heavily dependent on foreign aid to provide basic services such as education and health. Aid flows to Nigeria were equivalent to 1.4% of GDP in 2019, below the average of 2.4% of GDP for Africa and the average of 1.7% for lower middle-income African countries. In the Financial Flows scenario, foreign aid flows to Nigeria are below what is expected on the Current Path across the forecast horizon. By 2043, aid inflows into Nigeria represent 0.04% of GDP compared with the Current Path forecast of 0.15%. This is because donors generally prioritise low-income countries.

FDI can act as a catalyst for economic development as it brings much-needed capital and technology to the recipient countries. Nigeria has enormous FDI potential. Apart from oil and gas, the country has about 44 types of solid minerals in commercial quantities.[22The Nigeria Industrial Revolution Plan, 2014] Beyond natural resources, there are also tremendous opportunities for FDI in industries such as agriculture, tourism, consumer goods, textiles and entertainment given the large consumer market.

FDI flows to Nigeria were about 1.7% of GDP in 2019 before dropping to 0.5% in 2020 owing to the COVID-19 pandemic and its associated economic crisis. This is lower than the average for Africa's lower middle-income countries (2.6%). FDI flows into Nigeria are expected to increase in future. In the Financial Flows scenario, FDI flows to Nigeria in 2043 will represent 3.6% of GDP, compared with 3.3% in the Current Path forecast. Attracting more manufacturing FDI could help Nigeria diversify its economy away from oil by investing in a competitive manufacturing sector, which should contribute to sophisticating its exports and sustaining growth. However, infrastructural bottlenecks, corruption and a poor business climate curb this type of FDI flow into the country.

Given its large diaspora, Nigeria is the largest destination of remittances in sub-Saharan Africa. They are the leading source of external finance in the country, far ahead of FDI and official development assistance.

Remittance flows to Nigeria were estimated at 1.4% of GDP (US$22.4 billion) in 2019. However, this figure may be misleading, as a significant share of remittances to Nigeria occur via informal channels. The UN Conference on Trade and Development remittance inflows at US$17.2 billion in 2020, 28% less than the pre-pandemic level of US$23.8 billion in 2019, as the incomes of Nigerians in the diaspora were severely affected by the COVID-19 pandemic.[23Kouassi Yeboua, Jakkie Cilliers and Alize le Roux, Nigeria in 2050: Major player in the global economy or poverty capital?, ISS West Africa Report No.37, 2022.]

Across the forecast horizon, Nigeria remains a net recipient of remittances. In this scenario, the total net remittances to Nigeria are forecast to be US$93.9 billion (4.6% of GDP) by 2043, compared with US$84.2 billion (4.3%) in the Current Path forecast.

In the Current Path forecast, GDP per capita in Nigeria increases from US$5 773 in 2019 to US$8 755 in 2043. In the Financial Flows scenario it will be US$8 974. Overall, the financial flows scenario has a modest impact on GDP per capita in Nigeria.

In contrast to FDI, external financial flows such as remittances and aid do not have a clear relationship with economic growth. Also, although FDI is diversifying into manufacturing and other sectors, it still mostly goes to the oil and gas sector, which has little connection with the other sectors of the economy.

The Financial Flows scenario reduces the number of extremely poor Nigerians by about 5.3 million by 2043 compared with the Current Path forecast (as measured using the US$3.20 threshold). Remittances improve the economic conditions of the recipient households and also help to invest in education and improve employment and income prospects of poor people.

Whereas 75.5% of the Nigerian population lived in extreme poverty in 2019, the rate would be 58.9% in the Financial Flows scenario by 2043, compared with 60.2% in the Current Path forecast. The extreme poverty rate in this scenario will be about 11 percentage points above the average for lower middle-income countries in Africa.

Infrastructure scenario

Infrastructure scenario

The Infrastructure scenario represents a reasonable but ambitious increase in infrastructure spending across Africa, focusing on basic infrastructure (roads, water, sanitation, electricity access and ICT) in low-income countries and increasing emphasis on advanced infrastructure (such as ports, airports, railway and electricity generation) in higher-income countries.

Note that health and sanitation infrastructure is included as part of the Health/WaSH scenario and that ICT infrastructure and more rapid uptake of renewables are part of the Leapfrogging scenario. The interventions there push directly on outcomes, whereas those modelled in this scenario increase infrastructure spending, indirectly boosting other forms of infrastructure, including that supporting health, sanitation and ICT.

The intervention is explained here in the thematic part of the website.

In 2019, the total number of people with access to electricity in Nigeria was about 107.4 million, representing 52.7% of the population. The Infrastructure scenario increases this number to 304.7 million by 2043, constituting 78.6% of the population. This is slightly above the projected 295.3 million people (76.2% of the population) in the Current Path forecast for 2043.

By 2043, it is projected that 88.5% of the urban population in Nigeria will have access to electricity in the Infrastructure scenario, compared with 86% in the Current Path forecast. However, only 62.2% (89.7 million people) and 59.8% (86.2 million people) of the rural population will have access to electricity by 2043 in the Infrastructure scenario and the Current Path forecast, respectively. This indicates a disparity in access to electricity between urban and rural population in both the Current Path forecast and the Infrastructure scenario.

Indicator 9.1.1 in the Sustainable Development Goals refers to the proportion of the rural population who live within 2 km of an all-season road and is captured in the Rural Access Index.

There is a strong link between investing in rural access roads and positive socio-economic impacts, such as improving rural income, reducing poverty, reducing maternal deaths, improving paediatric health and increased agricultural productivity.[24A le Roux et al., Climate adaptation: Risk management and resilience optimisation for vulnerable road access in Africa, 2019]

In 2019, 54.6% of the rural population in Nigeria resided within 2 km of an all-weather road, below the average of 61.4% for lower middle-income African countries. In the Infrastructure scenario, it is projected to increase to 62.2% by 2043, slightly above the Current Path forecast of 61.7%, but below the average of 67.8% for lower middle-income countries in Africa.

Nigeria's GDP per capita is forecast to rise to US$8 851 by 2043 in the Infrastructure scenario. This is US$96 more than the Current Path forecast in the same year but slightly below the average of US$9 142 for lower middle-income countries in Africa. Increased investment in infrastructure improves connectivity and reduces transaction costs, positively affecting productivity and economic growth.

In the Infrastructure scenario, the extreme poverty rate (at US$3.20) is projected to decline from 75.5% in 2019 to 59.8% in 2043. This is equivalent to 231.8 million people living in poverty by 2043, compared with233.4 million in the Current Path forecast. The poverty rate in this scenario is still significantly higher than the projected average of 38.3% for lower middle-income African countries.

Infrastructure development facilitates business and industrial development and increases efficiency in the delivery of social services. Important basic infrastructure such as roads and electricity have a vital role in achieving sustainable and inclusive economic growth and development.

Governance scenario

Governance scenario

The Governance scenario represents a reasonable but ambitious improvement in accountability and reduces corruption, and hence improves the quality of service delivery by government.

The intervention is explained here in the thematic part of the website.

As defined by the World Bank, government effectiveness 'captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies'.

Mismanagement, nepotism and favouritism characterise governance dynamics in Nigeria. Nigeria finds itself in the bottom half of the Mo Ibrahim African Governance Index, with a score of 43.6 out of 100 and was ranked 32nd out of 54 countries in Africa in 2019.[25Mo Ibrahim Foundation, 2020 Ibrahim Index of African Governance – Index report] Weak government capacity and corruption have undermined government effectiveness in service delivery in the country.

In both the Current Path forecast and the Governance scenario, the government effectiveness score for Nigeria is projected to increase across the forecast horizon.

By 2043, the projected score for government effectiveness is 2.2 (out of a maximum of 5) in the Governance scenario. This is 4.7% higher than the projected score in the Current Path forecast in the same year. Nigeria will have a slightly lower government effectiveness score than the projected average of 2.3 for Africa lower middle-income countries in 2043.

In the Governance scenario, Nigeria's GDP per capita is projected to increase to US$8 979 by 2043, which is US$224 more than in the Current Path forecast for the same year. However, GDP per capita in this scenario by 2043 will be lower than the projected average of US$9 142 for lower middle-income countries in Africa.

Critical determinants of growth depend on governance and institutional setting in a country. Authorities in Nigeria should improve governance to enhance economic growth and income levels.

At the US$3.20 threshold, the poverty rate in Nigeria is projected to decline to 59.2% by 2043 in the Governance scenario, which is significantly higher than the projected average of 38.3% for lower middle-income countries in Africa in the same year. The poverty rate of 59.2% in the scenario in 2043 translates to 4 million fewer people living in extreme poverty than in the Current Path forecast (233 million people).

Impact of scenarios on carbon emissions

Impact of scenarios on carbon emissions

This section presents projections for carbon emissions in the Current Path for Nigeria and the 11 scenarios. Note that IFs uses carbon equivalents rather than CO2 equivalents.

In 2019, Nigeria released about 39.3 million tons of carbon. In the Current Path forecast, it is expected to release 198 million tons by 2043, an increase of 403.8% over the period. Although carbon emissions are set to increase with increased economic activity, Nigeria's carbon emissions come from a low base compared with developed countries. Like many developing countries, Nigeria will disproportionately suffer the impact of climate change, which it has contributed very little to. Nonetheless, the country must reduce its carbon emissions and move towards renewable energy for sustainable growth and to mitigate climate change.

The Free Trade scenario has the most significant impact on carbon emissions, followed by the Manufacturing/Transfers scenario. The Demographic scenario has the lowest level of carbon emissions. The reduction of population growth reduces population pressure on the utilisation of resources and hence minimises environmental degradation. Except for the Demographic scenario, the amount of carbon emissions in all the scenarios is higher than the Current Path forecast in 2043. By 2043, the amount of carbon emissions ranges from 196.7 million tons (Demographic scenario) to 217.7 million tons (Free Trade scenario).

Combined Agenda 2063 scenario

Combined Agenda 2063 scenario

Download to pdf

The Combined Agenda 2063 scenario consists of the combination of all 11 sectoral scenarios presented above, namely the Stability, Demographic, Health/WaSH, Agriculture, Education, Manufacturing/Transfers, Leapfrogging, Free Trade, Financial Flows, Infrastructure and Governance scenarios. The cumulative impact of better education, health, infrastructure, etc. means that countries get an additional benefit in the integrated IFs forecasting platform, which we refer to as the synergistic effect. Chart 55 presents the contribution of each of these 12 components to GDP per capita in the Combined Agenda 2063 scenario as a stacked area graph.

The synergistic effect of implementing all 11 scenarios simultaneously is that GDP per capita increases by US$1 641.5 by 2043, highlighting the importance of a holistic approach to development.

The Free Trade scenario has the most significant impact on GDP per capita by 2043, followed by the Manufacturing/Transfers scenario. The Health/WaSH scenario has the smallest impact on GDP per capita. The analysis suggests that policies to strengthen the manufacturing sector associated with trade liberalisation will have the most significant potential to improve human and economic development in Nigeria.

Whereas Chart 55 presents a stacked area graph on the contribution of each scenario to GDP per capita as well as the additional benefit or synergistic effect, Chart 56 presents only the GDP per capita in the Current Path forecast and the Combined Agenda 2063 scenario.

In the Combined Agenda Scenario, it is assumed that the Federal Government of Nigeria makes a concerted effort to remove the binding constraints to growth and development in the country.

The Combined Agenda 2063 scenario has a much greater impact on GDP per capita than the individual thematic scenarios. By 2033, Nigeria’s GDP per capita is US$1 677 more than in the Current Path forecast, and by 2043 it is expected to be at US$14 857, i.e. US$6 102 more than the Current Path forecast for that year. It means that by 2043, GDP per capita would have increased by almost 70% in the Combined Agenda 2063 scenario compared with the Current Path forecast.

The Combined Agenda 2063 scenario shows that a policy push across all the development sectors is necessary to achieve sustained growth and development in Nigeria.

At the US$3.20 threshold, the rate of extreme poverty declines to about 35.9% (133.8 million people) in the Combined Agenda 2063 scenario, compared with a rate of 60.2% (233.4 million people) in the Current Path forecast. In the Combined Agenda 2063 scenario, almost 100 million fewer people will be living in extreme poverty by 2043 than in the Current Path forecast. The poverty rate in the Combined Agenda 2063 scenario is 2.4 percentage points below the projected average of 38.3% for lower middle-income Africa.

See Chart 8 to view the Current Path forecast of the sectoral composition of the economy.

Initially, the share of agriculture to GDP (%) will record the highest improvement compared with the Current Path forecast. However, after 2030, it will be outpaced by the service sector, with its share towards GDP being 4.5 percentage points above the Current Path forecast for 2043. However, the share of the manufacturing sector in this scenario is 2.1 percentage points lower than that of the Current Path forecast.

In absolute terms, the contribution of the service sector will experience the largest improvement compared with the Current Path forecast. In the Combined Agenda 2063 scenario, the contribution of the service sector to GDP is US$1.3 trillion larger by 2043 than in the Current Path forecast. The service sector is followed by the manufacturing industry, with its value in the scenario being US$263.5 billion larger than the value forecast on the Current Path.

The contributions of the ICT, agriculture, materials and energy sectors to GDP in the Combined Agenda 2063 scenario are, respectively, US$146.7 billion, US$72 billion, US$17.7 billion and US$13.7 million larger than the Current Path forecast for 2043. Going forward, the service sector will continue to dominate the Nigerian economy.

The Combined Agenda 2063 scenario dramatically impacts the expansion of the Nigerian economy. In this scenario, GDP is projected to expand from US$560 billion in 2019 to US$3.77 trillion by 2043. The value projected for 2043 in this scenario is about US$1.8 trillion larger than the Current Path Forecast (almost twice the value of the Current Paths forecast value).

The Combined Agenda 2063 scenario shows that a policy push across all the development sectors is necessary to achieve sustained growth in Nigeria.

The Combined Agenda 2063 scenario has a significant impact on carbon emissions. In this scenario, carbon emissions increase from about 39.3 million tons in 2019 to 288.7 million tons by 2043. This is nearly a 634.6% increase, compared with an increase of 403.8% over the same period on the Current Path. By 2043, carbon emissions in the Combined Agenda 2063 scenario are expected to be about 91 million tons more than on the Current Path.

The materialisation of the Combined Agenda 2063 scenario would stimulate high economic growth in Nigeria, but at a high environmental cost. To mitigate the environmental impact of this scenario, its implementation should be accompanied by concrete steps to accelerate the energy transition towards renewables

Endnotes

  1. NPC/Nigeria and ICF. Nigeria Demographic and Health Survey 2018, 2018

  2. Data on religious affiliations of Nigeria’s population is limited, unreliable and contested; questions concerning religion are not integrated into the national census.

  3. Berkley Center for Religion, Peace & World Affairs, The impact of ethnic and religious diversity on Nigeria’s development priorities, February 2020

  4. The Africa Report, Nigeria at 60

  5. World Bank Group, Nigeria overview, 2020

  6. World Bank, More, and more productive, jobs for Nigeria: A profile of work and workers, 2016

  7. International Labour Organization O, Women and men in the informal economy: A statistical picture, 2018

  8. Premium Times, Nollywood contributes 2.3% to Nigeria’s GDP – Gbajabiamila, 16 April 2021

  9. Food and Agricultural Organization of the United Nations, Nigeria at a glance

  10. Food and Agricultural Organization of the United Nations, Nigeria at a glance

  11. OC Iheonu and NE Urama, Addressing poverty challenges in Nigeria, AfriHeritage Policy Brief No. 21, July 2019.

  12. International Energy Agency, World Energy Outlook, 2019

  13. Berlin Institute for Population and Development, Demographic dividend

  14. D Canning, S Raja and AS Yazbeck (eds.), Africa’s demographic transition: Dividend or disaster? Africa Development Forum Series, Washington, DC: World Bank, 2015.

  15. National fertiliser quality control bill factbook, Nigeria

  16. S Tunji, Food import bill jumps by 45% to N1.12tn– CBN report, Punch, 14 April 2022

  17. African Development Bank, African Economic Outlook 2021

  18. Central Intelligence Agency, CIA Factbook

  19. International Telecommunications Union, ICT Development Index, 2017

  20. Kouassi Yeboua, Jakkie Cilliers and Alize le Roux, Nigeria in 2050: Major player in the global economy or poverty capital?, ISS West Africa Report No.37, 2022.

  21. CZ Qiang and CM Rossotto, Economic impacts of broadband, in Information and communications for development 2009: Extending reach and increasing impact, Washington DC: World Bank, 2009, 35–50.

  22. The Nigeria Industrial Revolution Plan, 2014

  23. Kouassi Yeboua, Jakkie Cilliers and Alize le Roux, Nigeria in 2050: Major player in the global economy or poverty capital?, ISS West Africa Report No.37, 2022.

  24. A le Roux et al., Climate adaptation: Risk management and resilience optimisation for vulnerable road access in Africa, 2019

  25. Mo Ibrahim Foundation, 2020 Ibrahim Index of African Governance – Index report

Donors and sponsors

Reuse our work

  • All visualizations, data, and text produced by African Futures are completely open access under the Creative Commons BY license. You have the permission to use, distribute, and reproduce these in any medium, provided the source and authors are credited.
  • The data produced by third parties and made available by African Futures is subject to the license terms from the original third-party authors. We will always indicate the original source of the data in our documentation, so you should always check the license of any such third-party data before use and redistribution.
  • All of our charts can be embedded in any site.

Cite this research

Kouassi Yeboua (2022) Nigeria. Published online at futures.issafrica.org. Retrieved from https://futures.issafrica.org/geographic/countries/nigeria/ [Online Resource] Updated 6 September 2022.