The President Muhammadu Buhari-led administration might have much to worry about with the downturn of the Nigerian economy.
Nigeria’s unemployment and underemployment rates increased in 2017, the World Bank has said.
A statement issued by the World Bank in Abuja on Monday night showed that this was indicated in its report, ‘Nigeria Bi-annual Economic Update’.
According to the report, Nigeria emerged from recession in 2017, but poverty in the country increased slightly.
Titled: ‘Connecting to Compete’, the report stated that Nigeria’s Gross Domestic Product growth reached 0.8 per cent, driven by an expansion in oil output and continued steady growth in agriculture.
The World Bank said, “The decline in the non-oil, non-agriculture sector, however, continued, as aggregate demand remained weak and private sector credit low
“The rates of unemployment and underemployment increased in 2017 and poverty is estimated to have increased slightly. Gross Domestic Product growth in 2018 is expected to hover just over two per cent, largely oil sector-driven.
“Nigeria has a big home market, which is constrained by limited connective infrastructure, thereby reducing producers and firms’ ability to reach wider markets.”
It added, “This lack of connectivity dampens economic collaboration and cooperation among the country’s regions, limiting market integration and reducing producers and firms’ ability to reach wider markets.
“Spatial fragmentation and limited connections also hurt welfare and prospects for poverty reduction.”
The Global Lead, Territorial Development, World Bank, Somik Lall, said that spatial integration and sub-national specialisation were key to creating a nationally-integrated market for goods and services as well as attracting much-needed private investments, which in turn could enhance productivity through scale and specialisation.
According to the World Bank, Nigeria will benefit from policies to promote spatial integration and sub-national specialisation, which will stimulate diversified and long-term growth.
This can be achieved through market specialisation and differentiated positioning strategies for industrial clusters across the country, according to the report.
The bank said the key challenge for policymakers at the federal and state levels was to identify interventions (policy, regulatory, institutional and investment, etc.) that were best suited to realise development potential of sub national regions and integrate domestic markets.
For Nigeria to tap its spatial drivers of development, policymakers may want to focus on investments that reinforce clusters and economies of scale and optimise the connectivity between rural areas and the major urban markets, the bank said.
It added that policymakers must also address structural and land management issues in major urban nodes and along major growth corridors to remove or alleviate barriers that undermine the growth potential.