Nigeria at 64: Confronting the limits of economic potential

“According to the National Bureau of Statistics, the economy’s reliance on oil makes it vulnerable to external shocks, while non-oil sectors like agriculture and manufacturing remain underdeveloped.”

As Nigeria marks 64 years of independence, its status as Africa’s largest economy contrasts sharply with the realities on the ground. With over 220 million people and vast natural resources, the country should be a regional leader in prosperity and stability. Yet, the gap between Nigeria’s potential and its current trajectory remains stark. The celebratory mood is tempered by enduring challenges: economic instability, insecurity, and poor governance. Despite being endowed with significant natural wealth, Nigeria has failed to translate these assets into broad-based development.

The country’s dependence on oil exports has long been its Achilles’ heel. Over the decades, successive governments have pledged to diversify the economy, but progress has been negligible. Today, over 133 million Nigerians—more than half the population—are classified as multidimensionally poor, with millions facing food insecurity. According to the National Bureau of Statistics, the economy’s reliance on oil makes it vulnerable to external shocks, while non-oil sectors like agriculture and manufacturing remain underdeveloped.

This economic fragility has been compounded by inflationary pressures. While Nigeria’s headline inflation slowed to 32.15 percent in August 2024, food inflation, which affects the most vulnerable, remains elevated at 37.52 percent. The government’s inability to stabilise prices of essential commodities, such as rice and bread, underscores deeper structural issues that must be addressed if Nigeria is to achieve sustainable growth. Failure to control inflation further risks exacerbating social unrest, as seen in recent labour strikes and protests.

The Nigerian economy’s overreliance on oil remains a significant constraint. Although oil revenues have fueled government spending, they have not translated into improved living conditions for most citizens. Nigeria must urgently accelerate efforts to diversify its economic base. Agriculture, technology, and manufacturing have the potential to absorb millions of unemployed youths and reduce the country’s vulnerability to oil price fluctuations.

For diversification to succeed, however, structural reforms are needed. The administration should adopt a more targeted industrial policy that incentivizes investment in value-added sectors. Nigeria’s young, dynamic population is well-positioned to drive a technological revolution, but this will require improving the country’s unreliable energy infrastructure, as well as prioritising education and skills development.

One of the most pressing obstacles to economic recovery is insecurity. Boko Haram’s insurgency, banditry, and kidnappings continue to destabilise the country, particularly in the north. The economic impact is severe: businesses are hesitant to invest, agricultural production has been disrupted, and millions of people have been displaced. According to SBM Intelligence, over 11,000 lives have been lost to insurgent attacks between 2018 and 2024.

To restore investor confidence and safeguard economic activity, the administration must develop a cohesive, intelligence-led security strategy. This will require stronger coordination between the military and police forces, as well as community-based initiatives to address the root causes of violence. Without security, Nigeria’s prospects for long-term economic recovery are bleak.

The state of Nigeria’s education and healthcare systems represents another critical challenge. The country has one of the largest out-of-school populations globally, with 17.81 million children not attending school. This educational deficit has long-term implications for the country’s competitiveness and human capital development. Similarly, healthcare infrastructure remains underfunded, and access to quality medical services is limited. The widespread practice of medical tourism, in which wealthy Nigerians seek treatment abroad, is symptomatic of the country’s failure to provide adequate care domestically.

Revitalising these sectors should be a top priority. The government must increase public investment in education and healthcare, not only to improve immediate outcomes but also to prepare Nigeria’s workforce for a globalised economy. Without a healthy, educated population, the country cannot hope to compete on the international stage.

Despite these challenges, Nigeria retains significant economic potential. The burgeoning tech sector, led by companies like Flutterwave, highlights the opportunities available to a country with a young, entrepreneurial population. But for this potential to be realised, the government must adopt a more pragmatic approach to economic management. Immediate reforms should focus on diversifying revenue streams, enhancing public service delivery, and ensuring security.

The administration’s ability to implement these reforms will determine whether Nigeria can finally fulfil the promise of independence. For too long, short-term political interests have overshadowed long-term development goals. It is time for a reset—one that prioritises inclusive growth, sustainable development, and stability over quick gains.

Nigeria’s success, or failure, in the coming years will not only shape the future of its citizens but will also have implications for the broader African region. As the country commemorates its 64th year of independence, the imperative for change has never been clearer.