Infrastructure in any country is important for economic development. In Nigeria there is a problem with regards to infrastructure, this pushes the country back in terms of development. Countries such as Nigeria which lack proper infrastructure will heavily depend on other nations for survival. Improved infrastructure is a healthy indicator of economic development in a nation, constructions of firms can help reduce structural unemployment as new firms will have a demand for certain types of employees. In recent times, Nigeria has also had huge economic growth, improved infrastructure has increased industrialisation and competitiveness throughout the business sector. Telecommunications, sanitation and water supply are some of the many things that the Nigerian government has promised to improve. Africapitalism has not yet significantly had an impact on infrastructure. However as Africa’s natural resources and population grow, there will be many more opportunities to invest in the transport sector.
Economic Growth in Nigeria
Nigeria for the past decade has had very high economic growth, clocking at an average of 7.4%, this has been achieved via the thriving telecommunications, tourism, construction and manufacturing sectors. Economic growth was projected to be 6.9% in 2013 which was roughly two years after Africapitalism was adopted. In 2014 inflation rates were relatively high in between 7%-8.6%, however that same year the government of Nigeria implemented monetary policies that helped lower the average price level. In the year 2013, the government of Nigeria implemented contractionary monetary policies such as limiting the supply of money in the market and increasing interest rates, the government felt inflation rates were too high and also needed to lessen aggregate demand which were the main objectives of the government that financial year. In 2015, inflation was expected to plateau at 8.4%. Although economic growth has blossomed, poverty and unemployment still loom – the unemployment rate was at a staggering 23.9% in 2013 with roughly two thirds of the Nigerian population living under one dollar per day. The government has since promised that they will create jobs for the youth, which has not been going well so far.
Figure 4: Shows Nigeria’s GDP growth trend
Source: http://www.tradingeconomics.com/nigeria/gdp-growth-annual
As already alluded to earlier in our discussion, Nigeria’s main challenges are infrastructure, little economic freedom, corruption and overdependence on the oil and gas sector. These problems are prioritised by the Nigerian government which urges the private sector to get involved in developing infrastructure to help build the non oil sector. Diversification from the oil and gas sector is therefore, very key to the government. According to the African Development Bank (ADB), Nigeria and fellow African nations have undergone changes in public financial management in order to efficiently allocate resources. However this is not easily achieved as another problem that Nigeria suffers from is high levels of corruption. The Nigerian government tries to address this issue by creating economic crime organisations. The country has lived up to its promise of trying to reach its four main Millennium Development Goals and these are, achieving primary education for all, promoting gender equality, reducing extreme poverty and hunger and lowering child mortality rates. As a result of slowed oil production and a battered global economy, Nigeria’s GDP has not grown at heights that are expected of it, with the nation dropping from 6.63% to 5.89% growth rate in 2014-15. Agriculture is a big player in Nigeria’s economy accounting for roughly 40% of the country’s GDP. With low tax rates, oil and gas account for about 80% of tax received and about 25% of the country’s GDP. Whilst all other sectors only accounting for 20% of tax and 65%
