Nigeria’s GDP growth reached 3.84 percent in Q4 2024, yet millions remain in poverty due to the poor performance of essential sectors like water, electricity, transportation, and tourism. Each sector contributes minimally to GDP, with significant challenges persisting. Without urgent reforms and targeted investments, economic gains may fail to benefit the population, sustaining a cycle of poverty.
The economic reforms aimed at revitalizing Nigeria’s economy have yielded an impressive GDP growth rate of 3.84 percent in Q4 2024, according to the National Bureau of Statistics (NBS). However, beneath this positive statistic lies a troubling reality where millions remain entrenched in poverty due to weak performance in critical sub-sectors like water supply, electricity, transportation, and tourism, which are vital for daily life.
The water supply, sewerage, and waste management sector contributed a mere 0.18 percent to GDP in Q4 2024. Despite having vast water resources, only 10 percent of Lagos residents have access to piped water, leaving over 60 million Nigerians to rely on unsafe sanitation options. Insufficient budget allocation—less than 1 percent annually—further exacerbates public health issues, leading to widespread waterborne diseases like cholera.
The electricity and gas sector, crucial for industrial growth, accounted for only 0.49 percent of GDP, down from 0.54 percent in the previous year. Nigeria suffers annual economic losses of approximately $29 billion due to inefficient electricity supply, with over 80 million individuals lacking consistent access to power. Manufacturers are burdened by high operational costs compelled to use diesel generators, indicating a pressing need for reform in this critical area.
Transportation, essential for trade and logistics, saw its GDP contribution fall to 1.10 percent. The sector faces significant challenges from poor road conditions, soaring fuel prices, and an inadequate rail system. With 70 percent of roads in bad shape, transportation costs are driven up, negatively impacting the agricultural sector and overall economic development, costing Nigeria an estimated $10 billion annually.
The tourism and hospitality sector remained stagnant, contributing only 0.79 percent to GDP. Nigeria’s tourism potential is underutilized due to high operational costs, security issues, and weak domestic tourism. Comparatively, Nigeria earned a mere $400 million from tourism in 2023, while neighboring Kenya garnered $2.3 billion. The lack of improvement in security and travel facilitation hinders the growth of this lucrative industry.
Despite a notable GDP growth of 3.84 percent in Q4 2024, many citizens have yet to experience any tangible benefits—a sentiment echoed by economists. The focus should shift from mere growth statistics to ensuring that economic expansion translates into improved living standards for Nigerians. The hope of reaching a trillion-dollar economy must involve increased broad-based growth across various sectors.
To revitalize these struggling sectors, Nigeria must execute urgent reforms. Investment in a Water Infrastructure Emergency Plan is critical to providing universal access to clean water by 2030. The power sector necessitates structural reforms focused on sustainable energy sources, while transportation requires significant annual funding to repair roads and expand rail networks. Reviving tourism will demand enhanced security and reduced bureaucratic barriers to attract international visitors effectively.
In conclusion, Nigeria faces a pressing humanitarian crisis stemming from the underperformance of essential sectors. The neglect of water, electricity, transport, and tourism exacerbates poverty levels, while neighboring nations advance economically. Without immediate intervention and dedicated reforms, the nation risks continued stagnation in the economic growth that remains superficial in its impact on the populace.
The article highlights the dismal performance of Nigeria’s critical economic sectors—water supply, electricity, transportation, and tourism—despite promising GDP growth. The dire state of these sectors exacerbates poverty and threatens the livelihoods of millions. For growth to be meaningful, targeted reforms and investments in these areas are imperative to ensure that Nigeria’s economy can progress visibly and inclusively, lifting citizens out of poverty.
Original Source: businessday.ng
