Nigeria's Post-Election Sectoral Realities
4 Pages Posted: 28 Jul 2015
Date Written: July 9, 2015
Nigeria’s economy is Africa’s biggest. Indeed, just the largest six of Nigeria’s 46 production sectors combine to generate slightly more than South Africa’s GDP! However, the sobering sectoral reality is that, beyond the six giant sectors, Nigeria’s remaining 40 sectors are mostly small, constituting weak or broken links in Nigeria’s output and growth chain. Nigeria needs to accord priority to fixing the broken links.
Nigeria has a great potential to enable growth by urgently fixing the sectors that will contribute the most to the reduction of system-wide transaction costs and restore competitiveness and growth across all sectors, cities, states, and regions, such as rail transportation, gas, and petroleum products supply.
Unlike the colonial regime that had to rely on tax revenue to develop the narrow gauge rail tracks and termini across the country a century ago, the new regime is well placed to explore self-financing mechanisms that would enable the government to sell property development rights in advance and capture some of the anticipated increases in land values around new rail termini that will be constructed in hundreds of towns and big cities across the 36 states and the FCT to fund the development of an ultra-modern rail system across the country.
The resulting growth across sectors will provide jobs and better economic livelihoods for all. The reduction in system-wide transaction costs will translate to reduced cost of living that will enhance the welfare of all. Renewed growth of cities, states and regions will provide increased revenue for all levels of government, especially increased internally generated revenues for states and local government to raise the quality of health, education, security, defense and general infrastructural services delivered by government.
Note: Being Part 1 of the three-part article on ‘Nigeria's Post-Election Economic Realities’, http://ssrn.com/abstract=2628976 (excluding charts and tables).
Keywords: Nigeria, Post-Election, Economy, Fiscal Reality, Sectoral Reality, Priorities, Rail Transportation, Self-Financing Strategies
JEL Classification: E66, F32, F33
Suggested Citation: Suggested Citation