Recent data indicates that Nigeria’s GDP grew by 3.84 percent in Q4 2024; however, millions stay trapped in poverty due to poorly performing sub-sectors such as water supply, electricity, transportation, and tourism. These critical areas severely hinder economic progress, necessitating urgent reforms and investments to improve access to essential services and enhance living standards for the population.
The Nigerian economy has recently shown a GDP growth of 3.84 percent in Q4 2024, according to the National Bureau of Statistics (NBS); however, this growth masks a significant ongoing crisis where millions of Nigerians remain impoverished due to underperforming sub-sectors. Vital areas such as water supply, electricity, transportation, and tourism are lagging, perpetuating hardship for households and businesses across the nation.
The water supply, sewerage, and waste management sector contributed a meager 0.18 percent to GDP in Q4 2024, illustrating a drastic shortage of clean water access, with only 10 percent of Lagos residents receiving pipe-borne water. Moreover, inadequate sewage infrastructure has forced over 60 million Nigerians into open defecation, while less than 1 percent of the national budget is allocated to this crucial sector, exacerbating public health challenges.
The electricity and gas sector, another pivotal domain for industrial growth, saw its GDP contribution decrease to 0.49 percent in Q4 2024 from 0.54 percent in Q4 2023. Unreliable electricity costs the economy approximately $29 billion each year, leaving over 80 million citizens without power and forcing businesses to rely on expensive diesel generators, which hinders growth prospects.
Transportation, essential for trade and agriculture, also suffers, with its contribution to GDP dipping to 1.10 percent in Q4 2024. Poorly maintained roads and a lack of a functional rail system hinder efficient movement, resulting in soaring transportation costs. The World Bank reports that Nigeria loses over $10 billion annually due to inefficiencies in logistics, significantly impacting food prices and supply chains.
The tourism and hospitality sector, another potential economic driver, remained unchanged at 0.79 percent of GDP in Q4 2024. Comparatively, Nigeria earned a scant $400 million from tourism in 2023, a stark contrast to Kenya’s $2.3 billion, primarily due to security concerns and high operational costs. The absence of domestic tourism, alongside rampant kidnappings, inhibits growth in this vital area, where significant job creation opportunities are at stake.
Despite geopolitical optimisms such as potential GDP growth reaching 5.5 percent by 2025, many Nigerians remain unaware of improvements in their livelihoods. An economist emphasizes that growth figures are irrelevant if they do not translate into enhanced living conditions, advocating for a focus on the quality of economic growth rather than mere numbers.
To rejuvenate constrained sectors, Nigeria must urgently invest in infrastructure, notably through a Water Infrastructure Emergency Plan to ensure universal access to clean water by 2030. Structural reforms in the energy sector are imperative for a sustainable electricity supply, alongside allocations for road repairs and rail expansion in transportation. The tourism industry also requires strategic enhancement of security and reduced bureaucratic hurdles to attract more visitors.
In conclusion, Nigeria’s economic growth is overshadowed by the failures of critical sectors like water, electricity, transportation, and tourism, resulting in widespread poverty and stalled development. Only through prompt and targeted interventions can Nigeria transform economic figures into real improvements in living standards. The nation must prioritize investments and reforms in these areas to ensure genuine growth that benefits all its citizens ultimately. Without action, the prospects for alleviating poverty and promoting economic diversity remain bleak.
Original Source: businessday.ng
