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Jumpstarting Inclusive Growth : Unlocking the Productive Potential of Nigeria’s People and Resource Endowments (English)

Nigeria continues its recovery from the 2016 recession, sustaining an estimated 2 percent growthrate in 2019. The collapse of global oil prices during 2014–16, combined with lower domestic oil production, led to a sudden slowdown in economic activity. Nigeria’s annual real GDP growth rate, which averaged 7 percent from 2000 to 2014, fell to 2.7 percent in 2015 and to -1.6 percent in 2016. Growth rebounded to 0.8 percent in 2017, 1.9 percent in 2018, and then plateaued at 2 percent in the first half of 2019, where it is expected to remain for the rest of the year. Services, particularly telecoms, remained the main driver of growth in 2019, although trade started contracting amidst increasing use of policy measures aimed at import substitution. Agricultural growth picked up slightly but remains affected by insurgency in the Northeast region and ongoing farmer-herder conflicts. Industrial performance was mixed: growth in the oil sector remained stable, but manufacturing production slowed in a context of weaker power sector supply. Overall, the slow pace of recovery in 2019 is attributable to weak consumer demand and lower public and private investment. The annual headline inflation rate fell from a peak of 15.7 percent in 2016 to a projected 11.6 percent in 2019 but remains high and above the central bank’s target of 6–9 percent. The focus section of this report analyzes the evolution of productivity in Nigeria and identifies policies and institutions that can leverage productivity growth to accelerate Nigeria’s economic expansion and create new job opportunities. The analysis highlights four key priorities. First, ensuring policy transparency and predictability will be critical to reduce investment risk and promote growth outside the extractive industry. Second, investing in infrastructure, strengthening land tenure security, improving educational outcomes, and liberalizing the trade regime and enhancing trade and transport facilitation would help develop value chains and facilitate the efficient reallocation of factors of production, making Nigeria more cost-competitive. Third, reducing regulatory discretion would help attract foreign and domestic investment to the nonoil sector, encourage competition, and promote formalization.And fourth, improving access to finance could enable new firms to compete with incumbents and allow more productive firms to scale up their operations. Actions in these areas would lay the groundwork for Nigeria’s transition to a new economic model that more effectively utilizes its large, young population and abundant natural resources to support sustainable growth and poverty reduction.


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    Joseph-Raji,Gloria Aitalohi, Timmis,Emilija, Hernandez Ore,Marco Antonio, Shuaibu,Mohammed Isa, Ogebe,Joseph Orinya, Lothrop,Sean Craig, Jukic,Suzana, Cortes,Mariano, Popovic,Andrej, Kojima,Masami, Azad,M Abul Kalam, Engel,Jakob

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    Jumpstarting Inclusive Growth : Unlocking the Productive Potential of Nigeria’s People and Resource Endowments

  • Keywords

    Micro, Small and Medium Enterprise; national tax policy; high levels of income inequality; tax need; oil price; oil and gas export; improving access to finance; high population growth rate; Below the Poverty Line; no access to electricity; labor productivity; inclusive growth; collection of tax revenue; federal tax policy; monitoring and evaluation mechanism; negative impact on growth; crude oil price fall; degree of market concentration; spot crude oil price; limited access to finance; rate of population growth; average for sub-saharan africa; Oil and Gas Sector; Tax Policy and Administration; food and beverage sector; gross fixed capital formation; access to broadband internet; access to financial service; goods and services contract; real effective exchange rate; per capita income level; real per capita income; productive potential; resource endowments; monetary policy; Oil & Gas; output per worker; Agriculture; total factor productivity; foreign portfolio investment; commercial bank credit; human capital; current account balance; misallocation of resources; labor force entrant; Exchange Rates; tax policy reform; value of oil; Natural Resource Wealth; million people; global economic prospect; capital-output ratio; total public spending; economies of scale; oil sector; new job; less developed country; gross enrollment ratio; balance of payment; oil price decline; employment in agriculture; emerging market economy; misallocation of capital; living in poverty; high oil price; universal basic education; displaced people; number of jobs; impact of conflict; working age population; domestic oil production; regional value chain; barrels per day; domestic revenue mobilization; private sector credit; barrier to entry; multiple exchange rate; Public Expenditure Management; international oil price; foreign debt rating; share of capital; real gdp; intensity of conflict; intensity conflict; metal ore mining; junior secondary schooling; barriers to trade; rates of population; investments in infrastructure; use of technology; formal teacher training; crude oil production; removal of subsidy; current account deficit; global interest rates; sovereign bond market; debt to export; domestic interest rate; exchange rate stability; annual tax revenue; food import bill; consumer price index; cost of finance; access to financing; terms of trade; public debt stock; exports of oil; commercial bank lending; petroleum product pricing; corporate tax base; tax administration reform; net oil revenue; income declaration; public capital spending; crude oil purchase; Capital Adequacy Ratio; asset management company; asset management companies; refined petroleum product; open market operation; contribution of investment; average unemployment rate; complete primary school; monetary policy instrument; global value chain; regional market integration; domestic money market; monetary policy decision; errors and omission; Balance of Trade; net oil export; Travel and transportation; formal sector worker; rates of unemployment; basic education spending; foreign exchange inflow; growth in enrollment; high birth rate; basic education sector; public education spending; national unemployment rate; primary school follow; complete secondary school; labor force data; labor market entrant; agriculture and industry; decline in unemployment; rate of growth; personal income tax; oil export revenue; employment and unemployment; national fertility rate; lower oil price; children per woman; contribution to cost; cost of collection; average oil price; total labor force; credit information system; quality of infrastructure; quality and relevance; clarity and transparency; unilateral trade reforms; rules of origin; common external tariff; excise tax revenue; central bank operation; achieving price stability; monetary policy transparency; improving resource allocation; access to bank; efficient land use; fiscal responsibility framework; flow of credit; basic health care



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Joseph-Raji,Gloria Aitalohi Timmis,Emilija Hernandez Ore,Marco Antonio Shuaibu,Mohammed Isa Ogebe,Joseph Orinya Lothrop,Sean Craig Jukic,Suzana Cortes,Mariano Popovic,Andrej Kojima,Masami Azad,M Abul Kalam Engel,Jakob

Jumpstarting Inclusive Growth : Unlocking the Productive Potential of Nigeria’s People and Resource Endowments (English). Nigeria Economic Update Washington, D.C. : World Bank Group.