The operators, under the Association of Licensed Telecommunications Operators of Nigeria (ALTON), said much of the money currently funding network expansion and infrastructure development comes from domestic financing, reinvested earnings and other funding channels that are not fully captured by the National Bureau of Statistics’ capital importation framework.

The reaction follows the release of the NBS Capital Importation Report for the first quarter of 2026, which showed that foreign capital inflows into telecommunications dropped from $80.78 million a year earlier to $7.24 million.

According to the report, telecoms accounted for just 0.07% of the $10.37 billion that entered the Nigerian economy during the quarter.

ALTON said the figure presents only part of the investment picture.

“…this metric appears to capture only a portion of the total capital actively deployed within the sector.

“Our industry’s substantial Capital Expenditure (CAPEX) figures suggest that current investment derives from domestic capital sources, reinvested operational earnings – financial mechanisms that may not be fully reflected in conventional foreign capital importation metrics,” the association said.

The group noted that mobile network operators, tower companies and other telecom firms invested about N2.13 trillion in capital projects in 2025. It added that planned capital expenditure for 2026 currently stands at N1.86 trillion.

According to ALTON, the funds are being directed towards network expansion, infrastructure upgrades, technology improvements and measures aimed at strengthening operational resilience.

The association argued that the wide gap between reported foreign inflows and actual spending within the industry points to shortcomings in the current method used to track investments.

To address this, it called for collaboration between the Nigerian Communications Commission (NCC), the National Bureau of Statistics and the Central Bank of Nigeria to develop a comprehensive framework for measuring investment in the telecom sector.

“To ensure Nigeria’s telecommunications sector investment profile is accurately represented, ALTON respectfully proposes a collaborative engagement among the Nigerian Communications Commission, the National Bureau of Statistics, and the Central Bank of Nigeria to develop a more inclusive and comprehensive investment-tracking framework,” the association stated.

Despite pressure from inflation, high costs of operations and foreign exchange challenges, ALTON said operators have always invested heavily to maintain service quality and expand connectivity across the country.

The association also credited the Federal Government’s approval of a 50% tariff increase in 2025 with improving operators’ ability to reinvest in their networks.

“The timely intervention enabled operators to transition from financial distress to a sustainable, growth-focused model characterised by significant capital reinvestment,” it said.

While telecom operators questioned the reported investment figure, the NBS data showed that foreign investors significantly increased their exposure to Nigeria during the quarter.

Total capital importation rose to $10.37 billion in Q1 2026, representing an 83.8% increase from $5.64 billion recorded in the same period last year. Compared with the previous quarter, inflows climbed by nearly 61%.

However, most of the money flowed into short-term financial assets rather than long-term productive investments.

Portfolio investments accounted for $9.86 billion, or about 95% of total inflows, while foreign direct investment stood at just $135 million. Other investments, including loans and trade credits, contributed $374.5 million.

The banking sector attracted the largest share of foreign capital, receiving $7.55 billion, followed by the financing sector with $2.43 billion. Manufacturing drew $152.3 million, while telecommunications received $7.24 million.

New figures released on Monday by the National Bureau of Statistics showed the economy grew faster than the 3.13% recorded in the same period of 2025. 

Still, growth slowed slightly from the 3.99% posted in the fourth quarter of 2025.

The report points to resilience in the non-oil sector, even as crude oil production weakened during the quarter.

Agriculture recorded one of the strongest improvements. The sector grew by 3.15% in real terms, compared with just 0.07% in the first quarter of last year. Crop production was the biggest driver within the sector.

Services were the largest part of the economy, contributing 57.73% to total GDP. The sector expanded by 4.31% during the quarter, although that was slightly below the 4.33% growth recorded a year earlier.

Industry also improved moderately, growing by 3.50% from 3.42% in the corresponding period of 2025.

Nigeria’s non-oil sector continued to carry most of the economy. According to the NBS, the sector grew by 3.94% in real terms and accounted for 96.08% of total GDP in the quarter.

Telecommunications, crop production, trade, cement manufacturing, financial institutions, real estate, construction and road transport were among the sectors that supported growth.

Telecommunications was one of the strongest performers. Information and communication activities grew by 10.98% year-on-year and contributed 11.31% to real GDP, higher than the 10.59% recorded in the same quarter of 2025.

Trade contributed 17.89% to real GDP, while real estate accounted for 13.10%. The finance and insurance sector grew by 8.54%, and construction expanded by 6.38%.

In nominal terms, the country’s GDP stood at N110.79 trillion in the first quarter of 2026. That represents a 17.79% increase from the N94.05 trillion recorded in the same period last year.

Oil production, however, was under stress. Average daily crude oil output fell to 1.55 million barrels per day, lower than the 1.62 million barrels per day recorded in the first quarter of 2025. Production also dropped slightly from the 1.58 million barrels per day posted in the previous quarter.

Even with weaker output, the oil sector still recorded real growth of 2.57%, up from 1.87% a year earlier. Its contribution to total real GDP stood at 3.92%, slightly below the 3.97% recorded in the corresponding quarter of 2025.

The report also showed mixed performances across other sectors. Arts, entertainment and recreation recorded strong growth of 11.25%. On the other hand, electricity, gas, steam and air conditioning supply contracted by 15.30% in real terms.

Education growth slowed to 1.22%, down from 2.47% in the same period last year.

Nigeria is currently dealing with high inflation, expensive living costs and pressure on household spending. Inflation has remained above 15% despite ongoing reforms aimed at stabilising the economy.

Since 2025, the federal government has pushed ahead with policies including fuel subsidy removal, exchange rate unification and fiscal reforms as it tries to strengthen public finances and attract investment.

Compared with some African economies, Nigeria’s latest GDP growth figure placed it ahead of South Africa, where growth slowed to 1.9% in the same period. Ghana recorded 3.5% growth in the first quarter of 2026.

The National Bureau of Statistics (NBS) recently announced that Nigeria’s economy is significantly larger than previously reported, following the successful rebasing of its Gross Domestic Product (GDP).

The new figures put the 2024 nominal GDP at ₦372.8 trillion, representing a 35.4% increase from earlier estimates based on the old base year.

Shift in Economic Structure

The rebased figures also reveal a notable transformation in the structure of the economy compared to 2019. The services sector remains dominant, increasing its share to 53.1% (up from 50.2%), while agriculture now contributes 25.8% (up from 22.1%). The industrial sector saw a slight decrease to 22.1% from 27.7%.

One of the most significant developments is the rise of the real estate sector, which has moved up to become the third-largest contributor to the economy.

Top GDP Contributors and Sector Growth

According to the rebased 2019 base year data, the top five contributors to GDP were:

• Crop Production (17.6%)
• Trade (17.4%)
• Real Estate (10.8%)
• Telecommunications (6.8%)
• Crude Petroleum & Natural Gas (5.9%)

In Q1 2025, real GDP grew by 3.13%, improving from 2.27% in Q1 2024. Notably, the non-oil sector drove this growth, expanding by 3.19% and accounting for 96% of real GDP.

The services sector led the economy, contributing 57.5% of total GDP. Meanwhile, oil production remained steady at 1.62 million barrels per day, contributing just 3.97% to GDP.

Fastest Growing Real Sectors in Q1 2025

• Finance & Insurance – 15.0%
• Transportation & Storage – 14.1%
• Water Supply & Waste Management – 9.4%
• Information & Communication – 7.4%
• Construction – 6.2%

Why the Rebasing Matters

The NBS stated that the rebased GDP offers a more accurate reflection of Nigeria’s economic structure, incorporating high-growth sectors such as fintech, creative industries, and telecommunications that were previously under-represented.

This recalibration of economic data enhances planning, supports investor confidence, and aligns Nigeria’s statistics with global standards.

To accurately reflect these changes, countries periodically undertake a statistical exercise known as rebasing. This ensures that national accounts capture the current structure and performance of the economy rather than relying on outdated benchmarks.

For Nigeria, the National Bureau of Statistics (NBS) has just completed a significant rebasing of its GDP figures, moving the base year from 2010 to 2019; a crucial update aimed at providing more relevant, timely, and accurate economic data.

Despite its importance, rebasing is often misunderstood by the general public. Many assume it automatically means economic growth or an improvement in living standards, which isn’t always the case.

To help clear up these misconceptions and provide clarity, Techeconomy had a chat with Mr. Moses Waniko, an expert in national accounting and technical assistant to the statistician general, to answer some questions that shed light on what rebasing truly mean, and why they matter for everyday Nigerians.

Techeconomy (TE): What is GDP and GDP growth, and why are these statistics important?

Moses Waniko (MW): The Gross Domestic Product is the market value of all goods and services produced within a country in each period. It measures overall economic activity and signals the direction of economic growth. It is also a barometer to measure the health of the economy.

It is an internationally recognized indicator for measuring the size of an economy in each period of time. The GDP growth rate is a measure of the rate of change that a nation’s gross domestic product (GDP) experiences from one period to another either annually or quarterly.

TE: Is GDP growth synonymous with economic development?

MW: No, GDP growth is not synonymous with economic development. Development encompasses broader measures of human progress beyond measuring output (GDP) growth, which mostly measures economic progress. In addition to measures of economic progress, development includes social and environmental measures that are not well captured by GDP.

TE: What are the approaches for computing GDP?

MW: There are three approaches to computing GDP, which are;

The Expenditure Approach: This approach captures spending by key economic agents in an economy. It is the sum of consumption expenditures by households, investments expenditures by firms, government expenditures, as well as the difference between exports and imports:

GDP = C + I + G + (EX – IM)

The Income Approach: This approach measures the income earned by various factors of production. It is a sum of: compensation to workers, rental income, taxes on production and imports (less subsidies), interest, miscellaneous payments, and depreciation.

The Production or Value-Added Approach: Gross output (GO) less the purchase of intermediate inputs used to produce the final products.

TE: What is GDP rebasing / re-benchmarking?

MW: Rebasing/ re-benchmarking of the national account series (GDP) is the process of replacing an old base year used to compile volume measures of GDP with a new and more recent base year or price structure. Economies are dynamic in nature.

They grow, they shrink, they add new sectors, new products and new technologies, and consumer behaviour and tastes change over time.

Rebasing / Re-benchmarking is used to account for these changes, so as to give a more current snapshot of the economy, as well as improve the coverage of economic activities included in the GDP compilation framework.

The base year provides the reference point to which future values of the GDP are compared. It is a normal statistical procedure undertaken by the national statistical offices of countries to ensure that national accounts statistics present the most accurate reflection of the economy as possible.

TE: What are the Key benefits of rebasing/re- benchmarking

MW: The key benefit of the rebasing exercise is that its results enable policy makers and analysts obtain a more accurate set of economic statistics that is a truer reflection of current realities for evidence-based decision-making. It also reveals a more accurate estimate of the size and structure of the economy by incorporating new economic activities that were not previously captured in the computational framework.

Rebasing will enable government to have a better understanding of the structure of the economy, an indication of sectoral growth drivers, sectors where policies and resources should be channeled in order to grow the economy, create jobs, improve infrastructure and reduce poverty.

TE: How often should a country rebase?

MW: The UN Statistical Commission (UNSC) recommends that countries rebase every five years. However, some countries do at intervals of less than five years.

TE: Why is Nigeria rebasing the GDP at an interval more than recommended by the UNSC

MW: GDP rebasing is a resource intensive project. It requires major surveys that are highly capital intensive such as the Nigeria Living Standard Survey (NLSS), Agricultural Census and census/survey of Establishments.

The output of these surveys serves as input into the rebasing process. Sourcing the funds to conduct all of these surveys is always difficult hence the lag in rebasing interval.

TE: What influenced the choice of the base year?

MW: The last exercise was done in 2014. The UN Statistical Commission (UNSC) recommends that countries rebase their national accounts (GDP) estimates every five years.

An “appropriate” base year is one for which data is readily available and which witnessed relative stability. Currently, Nigeria’s base year is 2010, but a new base year of 2019 has been selected for the rebasing exercise.

TE: How long has it taken to complete this exercise?

MW: The time from preparation to publishing of the result of the rebasing exercise took approximately five (5) years. The preparatory work for the rebasing exercise commenced in the last quarter of 2018.

Since then, several activities have been undertaken some of which include field surveys for certain economic activities that were not adequately captured previously Such as the Research and Development (R&D), Trade and Transport Margin as well as Water Supply, Waste Management and Remediation. There was also validation with sector experts, and technical assistance from international development partners.

TE: What methodology was used for this rebasing exercise?

MW: The exercise was conducted in line with internationally-recognized methodology procedures and guides. The National Bureau of Statistics (NBS) started with an update of its survey frame, complemented by a listing exercise.

Three major methodological pillars were used to compile the rebased GDP estimates: System of National Accounts (SNA 2008 version), International Standard Industrial Classification (ISIC Revision 4), and Central Product Classification (CPC version 2), Construction of Supply and Use Tables (SUT) for Nigeria, Balance of Payment Version 6, Government Finance Statistics Manual 2014.

These are the most up to date methodologies in National Accounting. Less than half of the countries in the world have been able to make these upgrades successfully.

The SNA is the internationally agreed standard set of recommendations on how to compile measures of economic activity.

The ISIC is the international reference for the classification of productive activities. Its main purpose is to provide a set of activity categories that can be used for the collection and reporting of statistics according to such activities.

The CPC is a classification based on the physical characteristics of goods or on the nature of services rendered. Each type of good or service distinguished in the CPC in such a way that it is usually produced by only one activity as defined by the ISIC. The CPC covers products that are output of economic activities.

All of the above are applied into the Supply and Use Table (SUT). The SUT contains a pair of tables, namely, the Supply table and the Use table.

The SUT combines the product balances of all individual products (or group of products) in a matrix framework to present a coherent picture of how goods are produced and then supplied versus how they are used within the whole economy.

The development of the Supply and Use Table (SUT) formed the basis of the final estimates. Other refinements that were incorporated include the estimation of public administration, the conduct of the National Census on Commerce, Industries and Businesses (NCCIB) and the National Agricultural Sample Census (NASC). The data from these censuses were utilized in this rebasing.

TE: Do the new numbers imply that Nigeria is now a richer country?

MW: No, rebasing will not change the facts of our economy overnight. It will not make poverty and unemployment disappear overnight, but it will give us the tools and the policy ability to tackle these problems in order to reduce poverty and improve the welfare of our people.

The rebased GDP numbers imply that the level of economic activity is much higher than previously reported. It indicates a clearer picture of Nigeria’s economic landscape and the significant opportunity for growth and wealth creation in the Nigerian economy.

TE: Why are poverty and unemployment “high” when the economy is “doing well” as shown by rebased GDP?

MW: The rebasing exercise has revealed that the key determinant of the expanding output/GDP growth has been the dominance of capital-intensive rather than labour-intensive activities.

This suggests that increasing adoption of technology is leading to an expansion of output without the need to employ more labour. Rebasing does not change the challenges of poverty or unemployment but rather measures the economy more accurately so that policy can be designed to address them.

TE: Of what importance is the rebasing exercise to the “common man”?

MW: Rebasing the (Nigeria) GDP does not correct for inequality (where the benefits of a higher GDP may be concentrated in a few hands) or solve poverty problems; rather it brings the comparison of GDP estimates to the closest picture of reality as possible.

Having a better (and more accurate) picture of the economy is crucial to informing policy makers, investors, and even consumers on the current economic trends, which will help them make better informed decisions regarding their economic choices.

For example, policy makers may identify inequality as a factor inhibiting a more inclusive distribution of output / GDP growth and consequently design policies and programmes to address that inequality so that output / GDP growth is shared more equitably. It is in this way, the “common man” will feel the benefits of GDP rebasing exercise.

TE: What is the impact of the rebased numbers on the Nigerian economy?

MW: Nigeria’s GDP is expected to be a more accurate reflection of the structure and size of current economic activities in the country, presenting a clearer sectoral distribution and performance. As a result, better investment choices are expected to be made, resulting in higher profitability and even higher investments. This will help create jobs and also reduce poverty in Nigeria in the medium to long term.

TE: Given the rebased estimates, does it mean that Nigeria’s GDP for the last ten years has been inaccurate?

MW: The rebased numbers are a better reflection of the true size and structure of the economy. It does not mean the old series are wrong; it means we are capturing more activities and measuring better.

TE: What is the implication of the rebased GDP estimates on the real and nominal GDP?

MW: Nominal GDP measures the level of economic activity using the current year’s price level and quantities to obtain the total value of goods and services.

Real GDP measures the level of economic activity by making reference to a pre-selected base year, for the purpose of “cancelling out” price effects in the computation of the value of goods and services (to obtain the “real” value).

Thus, at the base year, the nominal and real values of the GDP estimates are equal.

As seen from the above question and answer session, the rebasing plays a critical role in unlocking a clearer, more accurate picture of Nigeria’s economic reality; when the most recent structure of the economy is captured, it reflects the true size and scope of economic activities.

This update is essential not just for statistical accuracy, but for improved policy making and more informed decisions across both public and private sectors. It enhances Nigeria’s ability to attract investment, as current data builds investor confidence and economic credibility.

Furthermore, rebasing affects major indicators like the debt-to-GDP ratio, offering a more realistic gauge of fiscal sustainability and supporting long-term strategies for inclusive and sustainable growth.

The recent rebasing of GDP (of Nigeria) by the National Bureau of Statistics, therefore, is a necessary step toward transparency, informed policy making, and sustainable economic planning.

While misconceptions may persist, a better understanding of these tools empowers the citizens, investors, and leaders alike to engage with the economy from a place of knowledge rather than speculation.

This surge is a blow to household incomes and the economy at large.

The NBS report reveals that food inflation, a major contributor to headline inflation, rose to 21.79% year-on-year in March 2025. 

This increase is attributed to high prices of staple food items like ginger, garri, and rice. Core inflation, which excludes volatile agricultural produce and energy, also climbed to 24.43% year-on-year.

A closer look at the data shows a noticeable divergence between urban and rural inflation rates. Urban inflation stood at 26.12% year-on-year, while rural inflation was 20.89%. On a month-on-month basis, urban inflation rose by 3.96%, compared to 2.40% in February.

Experts in the field have said the March inflation reading resulted from opposing forces, including moderating and upward factors. 

Samuel Oyekanmi, head of Research at Norrenberger, noted that the constant effect of rebasing and favourable base effects are expected to exert a moderating influence.

However, he warns that the depreciation of the naira and increase in petrol prices could raise costs across transport and goods.

“The continued effect of rebasing and favourable base effects are expected to exert a moderating influence,” Oyekanmi said.

The surge in inflation could put more pressure on the Central Bank of Nigeria (CBN) to tighten monetary policy further. Analysts expect the CBN to introduce liquidity management measures to support the currency and contain inflation expectations.

The outlook for Nigeria’s inflation rate reveals potential upside risks from electricity tariff adjustments and geopolitical disruptions to global supply chains.

Meristem projects inflation to stay within the 20-24% band through mid-year, pointing to expected stability in energy prices and a slower pace of naira depreciation.

According to Leadership report, NBS made the budgetary allocation following a cyberattack that compromised its website on December 18, 2024.

The breach, disclosed via the bureau’s official X (formerly Twitter) account, led to warnings for the public to disregard information on the platform, raising concerns about the agency’s digital infrastructure.

As Nigeria’s primary source of statistical data, the NBS’s vulnerability underscores the critical need for cybersecurity enhancements.

In addition to cybersecurity, the National Bureau of Statistics has outlined several initiatives in its N9.85 billion budget aimed at modernizing operations and improving service delivery. Among these are N500 million for the Labour Force Survey, N80 million for the Consumer Price Index production, and N60 million for quarterly GDP compilations.

Other allocations include N55 million for the National Agricultural Sample Survey, N50 million for tracking the 8-Point Agenda, and N45 million for service delivery capacity building. Notable projects also feature N15 million for demographic statistics and N9 million for the Annual Abstract of Statistics.

The bureau’s personnel costs account for the majority of the budget at N6.65 billion. However, the website hack, which lasted about a week, may delay critical government reports, underscoring the urgency of the proposed cybersecurity investments.

Nigeria faces escalating cyber threats, with organisations averaging 3,759 attacks weekly, according to Check Point Software Technologies’ 2024 African Perspectives on Cyber Security Report.

Public sector entities alone experience 1,791 attacks weekly, dominated by ransomware and botnet activities, revealing the critical vulnerability of government institutions as the nation accelerates digitalisation.

Drawing inspiration from successful examples around the world and local best practices, Nigeria’s government must adopt strategic approaches that promote inclusive growth, good governance, and prosperity for all its citizens.

In light of the recent data revealing Nigeria’s N1.41 trillion trade deficit between October and December 2023, as reported by the National Bureau of Statistics (NBS), the country is confronted with a pressing question: what paths should Nigeria pursue to address this challenge and forge a path towards economic stability and growth?

1. Diversification of exports: Nigeria should focus on diversifying its exports to reduce its dependence on oil exports and mitigate the impact of fluctuations in global oil prices. This could involve promoting other sectors such as agriculture, manufacturing, and services.

2. Import substitution: Nigeria can reduce its trade deficit by promoting local production of goods that are currently being imported. This could involve providing incentives for domestic industries, improving infrastructure, and enhancing the business environment to attract more domestic production.

3. Enhancing trade agreements: Nigeria should explore opportunities to strengthen trade agreements with other countries to boost exports and reduce trade deficits. This could involve negotiating preferential trade agreements, removing trade barriers, and improving market access for Nigerian products.

4. Improving competitiveness: Nigeria should focus on improving its competitiveness in the global market by investing in technology, innovation, and skills development. This could help Nigerian businesses to produce high-quality goods and services that are competitive on the international stage.

5. Addressing trade barriers: Nigeria should work towards addressing trade barriers such as tariffs, quotas, and non-tariff barriers that hinder trade with other countries. This could involve engaging in trade negotiations, advocating for fair trade practices, and implementing policies to facilitate trade.

6. Strengthening trade infrastructure: Nigeria should invest in improving trade infrastructure such as ports, roads, and logistics to facilitate trade and reduce transaction costs for exporters and importers. This would help to increase the efficiency of trade and boost Nigeria’s competitiveness in the global market.

Yes, there are examples of nations that have successfully applied similar strategies to address trade deficits and promote economic growth. Some examples include:

1. South Korea: South Korea transformed its economy by diversifying its exports beyond heavy industry and focusing on high-tech manufacturing and services. The government provided support for research and development, invested in education and skills training, and promoted innovation to enhance competitiveness. South Korea’s economy experienced rapid growth, and the country became a major exporter of products such as electronics, automobiles, and semiconductors.

2. China: China implemented import substitution policies to develop domestic industries and reduce reliance on foreign imports. The government provided incentives for domestic production, imposed tariffs on certain imports, and encouraged technology transfer to support local industries. China’s economy rapidly expanded, and the country became a global manufacturing hub, exporting a wide range of products to international markets.

3. Singapore: Singapore focused on enhancing trade agreements and strengthening trade infrastructure to promote economic growth. The country negotiated free trade agreements with various nations to increase market access for its exports and attract foreign investment. Singapore also invested heavily in developing world-class infrastructure, such as ports, airports, and logistics hubs, to facilitate trade and attract multinational companies.

4. Vietnam: Vietnam successfully diversified its exports by focusing on agriculture, manufacturing, and services sectors. The government implemented policies to support small and medium-sized enterprises, promote entrepreneurship, and boost productivity in key industries. Vietnam’s economy experienced strong growth, and the country became a major exporter of products such as textiles, electronics, and agricultural goods.

These examples demonstrate that strategic policies and investments in diversification, import substitution, trade agreements, competitiveness, trade barriers, and infrastructure can help countries address trade deficits and achieve sustainable economic growth.

Nigeria can draw lessons from these examples and tailor similar strategies to its specific context to promote economic development and reduce trade imbalances.

Nonetheless, at this juncture in Nigeria’s development, the recent revelation of a substantial N1.41 trillion trade deficit between October and December 2023, as disclosed by NBS, raises pertinent questions about the strategic direction of the government.

Reflecting on this data, there are critical lessons for Nigeria’s government to glean as they navigate the complexities of trade imbalances and economic sustainability.

Based on the examples of successful nations mentioned earlier, there are several key lessons that Nigeria’s government can consider at its current stage of development to address trade deficits and promote economic growth:

1. Diversification of exports: Nigeria should focus on diversifying its export base beyond oil and gas to other sectors such as agriculture, manufacturing, and services. Promoting value-added products and non-oil exports can help reduce reliance on volatile commodity prices and enhance competitiveness in international markets.

2. Investment in innovation and technology: Nigeria should prioritize investment in research and development, innovation, and technology to enhance productivity and competitiveness. Supporting local industries in adopting advanced technologies can help improve product quality, reduce costs, and drive export growth.

3. Infrastructure development: Nigeria should prioritize investment in critical infrastructure such as transportation, energy, and logistics to improve trade facilitation and connectivity. Developing world-class ports, airports, roads, and rail networks can lower transaction costs, enhance efficiency, and attract foreign investment.

4. Trade agreements and market access: Nigeria should actively pursue trade agreements with key trading partners to expand market access for its exports. Negotiating favourable trade deals and participating in regional economic blocs can help increase export opportunities and attract foreign investment.

5. Support for small and medium-sized enterprises: Nigeria should provide targeted support for small and medium-sized enterprises (SMEs) to enhance their competitiveness and integration into global value chains. Offering access to finance, business development services, and skills training can help SMEs thrive and contribute to export growth.

6. Economic diversification: Nigeria should prioritize economic diversification by developing new industries, promoting entrepreneurship, and creating an enabling environment for business growth. Encouraging investment in sectors such as agriculture, manufacturing, and services can help reduce dependency on oil revenues and promote sustainable economic development.

By implementing these lessons and strategies, Nigeria’s government can address trade deficits, promote economic growth, and drive sustainable development across various sectors of the economy.

Collaborating with stakeholders, leveraging international best practices, and adapting policies to local contexts are crucial for achieving long-term prosperity and competitiveness in the global market.

Nigeria’s government has a unique opportunity to learn from its past experiences and successes to drive forward its economic development agenda.

By implementing sound policies, fostering innovation, and prioritizing the needs of its people, the country can overcome its challenges and harness its growth potential.

Through collaboration, transparency, and good governance, Nigeria can position itself as a leading economy in Africa and a global player in the years to come.

It is time for the government to seize the moment and build a brighter future for all Nigerians.

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The figures obtained from the NBS Q3 Foreign Capital Importation, represents a drop of around 216.46% when compared with the figure for the previous quarter which stood at $605.04 million.

According to the report, on a year-on-year basis, FDI to the manufacturing sector declined by 71.2% from $392.54 recorded in Q3, 2022 to its figure in the quarter under review.

However, in the first nine months of 2023, the manufacturing sector received around $1.14 billion in foreign capital.

This represents an increase of $415.82 million when compared to the $724.75 million received in the same period of 2022.

The report also disclosed that the decline in foreign capital is not unique to the manufacturing sector but to the general economy in Q3.

Total capital importation for Q3 stood at $654.65 million which represents a drop of 36.45% when compared to the figure recorded in Q2 ($1.03 billion).

Every year, foreign capital declined by 43.55% from the $1.16 billion recorded in the same quarter of 2022.

It would be recalled that the manufacturing sector in the past few years has been faced with a series of problems that have curtailed its growth.

These problems include; rising foreign exchange rates, high energy costs occasioned by epileptic power supply, multiple taxation, inflation.

A review of the performance of some manufacturing firms listed on the NGX reveals that 8 companies recorded a foreign exchange loss of -N129.811 billion while only three of these companies recorded a foreign exchange gain of just N3.49 billion.

This coupled with the difficulty of multinationals in the manufacturing space to repatriate cash has resulted in notable exits in recent times. (Independent).

[Featured Image Credit]

The National Bureau of Statistics (NBS) stated this in the ‘Nigeria’s Gross Domestic Product Report’ for Q2 2022, released on the 26th of August, 2022.

Dr Femi Adeluyi, Technical Assistant (Research and Development) to the Minister, said the country’s Digital Economy sector under Professor Pantami has continued its trend of playing a key part in the growth of the economy.

The Report by the NBS indicated that the ICT sector contributed 18.44% to the total real GDP in Q2 2022.

“This is the highest contribution of ICT to the GDP and is truly unprecedented and marks the third time that the sector has achieved an unprecedented contribution to Nigeria’s GDP during the tenure of the Honourable Minister- in Q1 2020, Q2 2021 and now Q2 2022.

“The oil sector contributed 6.33% to the total real GDP in Q2 2022, which was lower that the contribution in Q2 ‘2021 and Q1 ‘2022, where it contributed 7.42% and 6.63% respectively. 

“The non-oil sector’s contribution grew by 4.77% in real terms, resulting in a 93.67% contribution to the nation’s GDP in the Q2 ‘2022, higher than Q2 ‘2021 and Q2 ‘2022, where it contributed 92.58% and 93.37% respectively.

“The Honorable Minister notes that the growing contribution of the ICT sector to the GDP is as a result of the commitment of the administration of President Muhammadu Buhari, to the development of the digital economy. 

“The diligent implementation of the National Digital Economy Policy and Strategy (NDEPS) for a Digital Nigeria, stakeholder engagement and creation of an enabling environment have all played an important role in this achievement.

“The support of President Muhammadu Buhari, has contributed immensely to the impressive developments in the sector. The unprecedented contribution of ICT to Nigeria’s GDP can also be attributed to the dynamic and results-oriented leadership of the sector. The GDP Report has shown how critical the ICT sector is to the growth of our country’s digital economy and, by extension, the general economy. 

“The Honourable Minister congratulates all stakeholders in the digital economy ecosystem for this cheering news”, Adeluyi said.

The Minister also renews his call to all sectors to take advantage of the Federal Government’s new focus on the digital economy to enable and improve their processes through the use of ICTs. 

“This would enhance the output of all the sectors of the economy and boost Nigeria’s GDP”, the statement concludes.

The Consumer Price Index (CPI) annual percentage change in value is known as inflation.

It accurately gauges how much a portfolio of goods and services’ prices vary over the course of a year. The CPI for 2022 increased to 15.60 percent (year-on-year) January 2022 by records from the Nigerian Statistics.

Based on the National Bureau of Statistics (NBS), Nigeria’s inflation rate increased from 9.0 percent in 2015 to 17.71 percent as at May 2022 (year on year).

It is obvious that over the years the value of money in Nigeria have been falling thereby causing negative impact. Usually, this inflation is expected to reduce purchasing power by 2 percent or 3 percent to bounce back to stability but it seen that the inflation in Nigeria has risen above 10 percent.

In a state like this, Nigeria is gradually tilting to hyper-inflation thereby reducing the value of the Naira. Over the past 10 years, Nigeria have long struggled with a general increase in the cost of food, goods, and other necessities as well as a decline in buying power which has barely retraced the market.

Inflation rates of 2 percent to 3 percent assist an economy because they stimulate consumers to take out more loans and make more expenditures because interest rates are also held at historically low levels at these levels.

How is Inflation caused?

Inflation is brought on by the following among others:

●       Changes in the cost of production and distribution.

●       An imbalance in the money supply and demand.

●       An increase in the tax rate on goods.

As it is known, the value of money decreases when the economy undergoes inflation, which is an increase in the price of goods and services which as a result, a given unit of currency now buys less products and services.

Implications of Inflation

According to data from the Nigeria Bureau of Statistics (NBS), the economy made improvement in 2022’s first quarter, as evidenced by a 3.1% growth in Gross Domestic Product (GDP). Both individuals and the nation as a whole are impacted by this high inflation.

The effects on consumers are the harshest – people can no longer maintain a budget since their income is so low. Consumers find it challenging to purchase even the necessities of life due to the high cost of everyday goods. They are forced to request higher pay as a result, which gives them no choice.

Inflation Control

In order to manage inflation, the government and the central bank typically regulate economy through monetary and fiscal policies. Monetary policy is the principal strategy employed (interest rates fluctuation).

However, inflation can be controlled with the following measures:

1. Monetary policy:-

Reduced economic growth and lesser inflation are the results of lower demand due to higher interest rates.

Interest rates can be raised by the central bank in reaction to inflation. Borrowing becomes more expensive and saving becomes more appealing at higher interest rates. Residents will have to make higher lease payments, which would leave them with less money to spend.

Consequently, households will be less able and less motivated to spend. Businesses will invest less because corporations won’t be as likely to borrow to finance investments.

Therefore, increased interest rates have a significant impact on slowing down investment and consumer expenditure, which results in a slower economic growth rate – inflation also slows down as economic development does.

2. Money supply control:- 

According to monetarists, there is a direct correlation between the money supply and inflation, hence reducing the money supply can indirectly reduce inflation. Reducing inflation should be possible if the expansion of the money supply can be managed.

Measures advised by the monetary school of thought include; budget deficit reduction (deflationary fiscal policy), elevated interest rates (contracting monetary policy) and government’s ability to control the currency type and quantity it issues.

3. Supply side fiscal policies:- 

Initiatives to make the economy more efficient and competitive, which will drive down long-term expenses as inflation is frequently brought on by ongoing cost increases and weak competition.

The economy may become more competitive and inflationary pressures may be reduced with the aid of supply side policies. For instance, more accommodating labor markets, industries and production activities might help ease the strain on inflation.

However, supply-side initiatives may take some time to implement in Nigeria due to the time required for construction and setting up manufacturing operations. In the meantime, this is likely ineffectual against inflation caused by growing demand.

4. Fiscal policy on tax increment:- 

Increased income taxes may have a moderating effect on demand, spending, and rising inflation.

Taxes (such as VAT and income tax) can be raised thus decreasing spending by the government to lower inflation. By lowering demand in the economy, this serves to improve the government’s budget condition.

These two measures both slow the expansion of the overall demand, which lowers inflation. Also, reduced Aggregate Demand (AD) growth can lower inflationary pressures without triggering a recession if economic growth is fast.

5. Wages and price control:- 

Theoretically, attempting to restrict wages and prices could assist in lowering inflationary pressures. However, because they are mostly ineffective, they are not frequently employed. Limiting wage growth can aid in containing inflation if wage inflation (produced, for example, by strong unions negotiating for higher real wages) is the primary cause of inflation. Lessening wage growth will lower business expenses and result in a decline in the economy’s excess demand. However, it can be challenging to control inflation through income programs, especially if the unions are strong. Furthermore, pay regulation calls for broad economic cooperation, but businesses that are experiencing a labor shortage will be more motivated to hire staff, even if it means going above and beyond government salary limits.

6. Global investment and exportation:- 

Nigeria investing in remunerative products such as oil-investment can help manage inflation less importation and increased exportation can give the Naira a worthy valuable.

Nigeria becoming a producer nation should not be overlooked as currently, the least of items are even imported. Exchange rates and other importation policies contribute to decreasing the purchasing power of consumers.

As interest rates rise, the value of currencies should rise as well (higher interest rate attracts hot money flows) Inflationary pressure will also be lessened by the exchange rate appreciation through lower cost of imports.

As a result of the decreased demand for exports and resulting lower overall demand in the economy, the price of imported commodities (such as gasoline and raw materials) would fall. Since exports become less competitive than domestic markets, exporting businesses will be motivated to reduce expenses and raise competitiveness over time.

By affiliating with a fixed exchange rate system, a nation may aim to keep inflation low. According to the reasoning, keeping inflation under control requires discipline, which can only be achieved if a currency’s value is fixed (or semi-fixed). The currency would start to decline if inflation increased because it would lose its appeal.

7. Demonetization and reissuance of money:- 

Conventional policies might not be suitable during a hyperinflationary environment. It can be difficult to alter future inflation expectations. It could be necessary to adopt a new currency or utilize another one, like the dollar, when people have lost faith in a certain currency as in the case of Zimbabwe. The issue of replacing the existing currency with a new one is the most extreme monetary measure. A fresh note is substituted for numerous old notes of money in this manner.

The valuation of deposit accounts is also determined in this manner. A measure like this is implemented when there is an excessive amount of note issuance and hyperinflation takes place in the area.

This measure has had great success. When a nation has an abundance of illicit currency, this action is frequently taken.

About the Author

Emmanuel Otori has over 9 years of experience working with 100 start-ups and SMEs across Nigeria. He has worked on the Growth and Employment (GEM) Project of the World Bank, GiZ, Consulted for businesses at the Abuja Enterprise Agency, Novustack, Splitspot and NITDA. He is the Chief Executive Officer at Abuja Data School.