A Divided Economic Outlook for Nigeria at 65
As Nigeria marks its 65th year of independence, the country’s economic journey has sparked intense debate among economists. While some see progress in education, infrastructure, and policy-driven recovery, others highlight persistent challenges such as poverty, weak industrialization, and missed opportunities that continue to hinder Africa’s largest economy.
At independence in 1960, Nigeria’s economy was heavily reliant on agriculture, which accounted for over half of GDP, provided most employment, and served as a primary source of export earnings through cash crops like cocoa, groundnuts, and palm oil. The oil sector had been discovered but remained a minor contributor. The economy was characterized by a dependence on primary commodities, low per capita income, and a small, uncompetitive industrial base focused on early import-substitution efforts.
Over time, Nigeria transitioned into an era dominated by the oil sector, with the petrodollar becoming a central pillar of the economy. Recent data from the National Bureau of Statistics shows that the oil sector remains a major contributor to the economy, with oil GDP expanding by 20.5% YoY in Q2 2025. This growth is attributed to increased crude output, improved security measures, and enhanced pipeline integrity, leading to a reduction in crude losses to their lowest level since 2009.
Despite these developments, the non-oil sector has also shown positive signs, growing by 3.6% YoY in Q2 2025, driven by services that expanded by 3.9% YoY. Financial services and a recovery in transport and storage have supported this growth.
Optimism Amid Challenges
Economist and CEO of Economic Associates, Ayo Teriba, highlights that while the past decade was marked by decline, the current moment presents a unique opportunity for celebration. He notes that for the first time since independence, Nigeria is experiencing an economic recovery that is policy-induced rather than driven by external shocks. This recovery is decoupled from oil prices, signaling a shift in economic dynamics.
Teriba credits President Bola Tinubu for this turnaround, citing improvements in external reserves, exchange rates, inflation, and GDP growth. However, he expresses concerns about the government’s fiscal management, emphasizing the need for better revenue generation from state assets rather than relying on taxes. He argues that the government should focus on maximizing returns from existing resources, such as the federal secretariat and national stadium, instead of imposing additional tax burdens on citizens.
On infrastructure projects, Teriba supports initiatives like the superhighway and legacy road projects but stresses the importance of involving private investors to alleviate the financial burden on the government. He advocates for market-driven funding models, similar to those used in telecoms and LNG sectors, to ensure sustainable development.
Critical Perspectives
Renowned economist Professor Akpan Ekpo offers a more critical assessment, arguing that Nigeria has been in decline despite its vast human and material resources. He points out that around 80% of Nigerians still lack basic needs such as running water, quality health, and education. Ekpo emphasizes the need for visionary leadership and structural reforms to achieve meaningful progress.
He highlights the lack of economic diversification, noting that manufactured imports account for about 55% of total imports, while exports of manufactured goods remain below 2%. Ekpo calls for a significant increase in the manufacturing sector’s contribution to GDP, suggesting that agriculture can play a key role in driving industrialization.
Former Chief Economist at Zenith Bank, Marcel Okeke, shares a more optimistic view, describing Nigeria as a “work in progress.” He acknowledges recent improvements in exports and terms of trade but warns against exporting essential food items that could exacerbate food insecurity.
Dr Muda Yusuf, Director/CEO of the Centre for the Promotion of Private Enterprise, highlights persistent macroeconomic instability, including currency depreciation, rising public debt, and unsustainable debt-service-to-revenue ratios. He advocates for credible monetary policy, expansion of non-oil exports, and efficient public spending to restore economic stability.
Calls for Reform and Clarity
Economist Dr Doyin Salami underscores the volatility of Nigeria’s economic growth pattern and the need for rapid growth to keep pace with population expansion. He highlights the lack of clear population data and the challenges it poses for planning. Salami also points out that investment in Nigeria does not necessarily lead to growth, citing the need for targeted investments that drive productivity.
He further notes the de-industrialization of the economy, with services now accounting for over half of the economy. This shift has led to a large informal sector, where most workers are vulnerable and productive. Salami concludes by calling for clarity in economic strategy, advocating for policies that prioritize global competitiveness and encourage private investment.
In summary, Nigeria’s economic journey at 65 reflects both progress and persistent challenges. While there are reasons for optimism, the path forward requires sustained reforms, effective governance, and a commitment to inclusive growth.
