Security remains a challenge in Nigeria’s economic recovery despite gains made in the conflict with Boko Haram in the north east and the intensification of dialogue with militants in the Niger Delta, according to AFRICAN ECONOMIC OUTLOOK report on the Nigerian economy.
Authors of the report: Robert Asogwa, Barbara Barungi, Ojijo Odhiambo
- In 2016, Nigeria’s economy slipped into recession for the first time in more than two decades reflecting adverse economic shocks, inconsistent economic policies, and deepening security problems in the north east and Delta regions.
- The outlook for 2017 is for a moderate economic recovery with real GDP projected to grow at 2.2% spurred by increased infrastructure spending and restoration of oil production to previous levels.
- The government has initiated a plan for an integrated framework for development programmes in the north east through implementation of targeted social safety initiatives across the country. Private investments are a key policy priority, aimed at driving economic diversification through entrepreneurship and industrialisation in the lead sectors of agribusiness, manufacturing and mining.
The report states that ‘in addition to a military solution, the federal government is committed to implementing economic recovery and development interventions aimed at addressing the deepening fragility and vulnerability in the conflict-affected north east and the Niger Delta.
“The Nigerian economy continues to face serious macroeconomic challenges and is in a recession for the first time in decades. Gross domestic product (GDP) growth for 2016 is estimated at -1.5%, with a moderate recovery expected in 2017.”
The report states further that ‘the acceleration of the implementation of the Nigeria Industrial Revolution Plan (NIRP) is a key priority for fostering industrialisation and that the priority sectors identified are mining and quarrying, which contributed 7.1% to overall GDP in 2016, and manufacturing, which declined 2.6 % yearon-year due to increased costs in business operations, resulting mainly from foreign exchange restrictions.
The manufacturing sector recorded a general decline in 2016, with an estimated 272 firms shutting down and industrial capacity utilisation dropping significantly from 51.4% in 2015 to 35.4% in 2016.