Although economies across the world are beginning to stutter as a consequence of dealing with the events of 2020, this economic story has not necessarily been uniformly repeated across the world. In fact, not only have some economies been able to better weather the economic storm that 2020 unleashed, some even look poised to experience some growth – albeit relatively modest.
This is the picture that the most recent economic data coming out of Nigeria is painting. According to a recent press release, Nigeria’s economy looks set to enjoy a very gradual growth rate in this quarter, which will bring Nigeria out of recession. On Thursday, the National Bureau of Statistics released the latest economic figures for Q4 of 2020, which signal a 0.11% growth rate. Of course, this must be counterbalanced by the 6.11% fall it suffered in Q3 2020, which had been brought on by a global economic slowdown caused by the pandemic.
While this is a modest increase, the fact that Nigeria’s economy has been able to bounce back somewhat is a very positive sign.
But beyond the ebb and flow of growth rates, what is the full extent of the economic picture in Nigeria? Although oil and petroleum production has dominated the Nigerian economy for some time, as the Nigerian government looks to diversify its economic base, new sectors and industries are beginning to emerge as solid sources of revenue.
With that said, let’s take a look at some of the sectors that look poised to become mainstays of the Nigerian economy in the coming months and years.
INFORMATION AND COMMUNICATIONS TECHNOLOGY SERVICES SECTOR
One of the fastest growing sectors across Africa is the information and communications technology sector, which also encompasses telecoms. This is no different for Nigeria, and as citizens of the country turn towards digital services providers for the needs of work, education and daily life, this sector will become increasingly important for the Nigerian economy.
The telecommunications sector, for example, posted an 18.1% GDP growth rate in the second quarter of 2020, which was a massive boost from even the previous quarter. Similarly, the financial institutions sector posted a 28.41% GDP growth rate, which was among the fastest of any sector of the Nigerian economy. Evidently, Nigerians, as is the case with Africans across the continent, are turning towards technology at an incredibly rapid pace.
ONLINE RECREATION: ONLINE CASINOS AND DIGITAL SERVICES
But it is not only the tech and manufacturing sectors that will prove to be a major source of revenue for the Nigerian economy in the coming year – recreation will also continue to contribute a great deal to the state coffers. In one respect, this makes intuitive sense, given that so many Nigerians are being lifted out of poverty as the Nigerian economy expands. Indeed, if you have a growing population with increasing amounts of disposable income, it seems natural that some of this would be spent on recreation.
Within this, one industry that is indicative of the kind of growth we can expect in this sector is online casinos. For many years, the online casino business was somewhat of a laggard due to limited access to mobile internet among the population. As this gap closes, however, more and more users are turning to online casinos as a way of spending their free time. Even the fact that Nigeria is generally under-banked in terms of public access to bank accounts has not stopped the growth of online casinos, with an increasing number of online casinos accepting Neteller filling this gap. With that said, this sector looks poised to experience meteoric growth in the coming year.
With a population stretching to well over 200 million, the manufacturing industry in Nigeria holds huge potential. Such a large population not only creates a potential consumer base to whom goods can be sold, but also provides the workforce needed to support this level of production. This is an ideal scenario for a manufacturer, as both customers and employees are needed to drive the manufacturing industry forward.
Evidently, this is something the Nigerian government is keen to take advantage of, and in recent years, a lot of resources have been put into expanding the manufacturing capability of the country – seeing long-term growth between 2010 and 2020. Despite the impact of Covid on the global economy causing an overall contraction in the sector, manufacturing in 2020 contributed to Nigerian GDP to the tune of 8.99% by the end of the year – placing it between 2017 and 2018’s overall contributions. It also saw significant nominal growth of 24.60% in Q4 2020, as compared with 13.54% in Q3, perhaps signalling that once Covid uncertainty is gone, investors will be ready to again place their faith in the industry.