Nigeria’s reported GDP growth of 3.84% hides a grim reality where millions remain trapped in poverty due to the underperformance of critical sub-sectors such as water supply, electricity, transportation, and tourism. These sectors contribute minimally to the economy, with urgent reforms needed to improve living standards and economic stability amidst ongoing challenges.
The National Bureau of Statistics (NBS) reported a GDP growth of 3.84 percent in Q4 2024, the highest since the post-COVID era under the Renewed Hope economic reforms. However, this growth masks a troubling reality: millions remain in poverty as critical sub-sectors falter. Key areas like water supply, electricity, transportation, and tourism underperform, contributing minimally to the economy and leaving many households and businesses in hardship.
The underperforming sub-sector of Water Supply, Sewerage, and Waste Management only accounted for 0.18 percent of GDP in Q4 2024. Although Nigeria possesses ample water resources, access to clean water is a grave issue; UNICEF reveals that merely 10 percent of Lagos residents have piped water, with over 60 million Nigerians relying on open defecation due to inadequate sewage facilities.
The power sector continues to be a significant stumbling block, with contributions slumping to 0.49 percent in Q4 2024 from 0.54 percent a year prior. With about 80 million Nigerians lacking electricity, the situation includes frequent outages and exorbitant costs for businesses relying on expensive diesel generators, further stalling development as Nigeria ranks low in power generation compared to other economies.
Transportation and logistics represent another lagging area, contributing only 1.10 percent to the GDP as of Q4 2024. With 70 percent of roads in disrepair and a limited rail network, the movement of goods and people has become increasingly cumbersome. Fuel price hikes exacerbate the already high costs of transportation, significantly impacting food prices and overall economic stability.
In terms of tourism and hospitality, the sector remains stagnant, contributing a mere 0.79 percent to GDP. Despite its potential, issues such as security concerns and high operating costs hinder Nigeria’s ability to capitalize on a lucrative industry. Comparatively, Nigeria’s tourism earnings lag significantly behind other African nations, indicating a missed opportunity to foster economic growth through this sector.
Despite GDP growth appearing promising on paper, it fails to reflect improvements in the daily lives of many Nigerians. Economists stress the need for focusing not merely on growth metrics but on the overall quality of development. Administration representatives have expressed optimism for a trillion-dollar economy in the future, yet limited growth in critical areas presents a pressing challenge.
To address the shortcomings in these crucial sub-sectors, Nigeria must undertake urgent reforms. Investment in water infrastructure and modifications to the power sector are vital, while improved transportation networks and renewed focus on tourism could stimulate growth. All of these measures require immediate action to transform economic statistics into tangible benefits for the populace.
In conclusion, Nigeria’s economic narrative often centers on oil and finance while neglecting essential services critical to everyday life. The failures in water, electricity, transport, and tourism sectors signify a humanitarian crisis intertwined with economic challenges. Without proactive intervention, the cycle of poverty will persist, jeopardizing Nigeria’s economic prospects and the well-being of millions.
The analysis reveals that while Nigeria has reported significant GDP growth, this figure does not correlate with improvements in the welfare of its citizens. Critical sub-sectors like water supply, electricity, transportation, and tourism suffer severe neglect, causing widespread poverty and economic instability. Urgent reforms and investments are essential to revitalize these areas, ensuring that economic growth translates into real benefits for the populace and to foster a future free from poverty. If Nigeria does not address these issues promptly, the risk of being left further behind in global development remains high.
Original Source: businessday.ng
