Nigeria’s poorly performing sub-sectors keep millions in poverty, NBS Q4 data shows

No gain without pain, as the saying goes. The Renewed Hope economic reforms have driven Nigeria’s highest GDP growth since the post-COVID era—3.84 percent in Q4 2024, according to the National Bureau of Statistics (NBS).

But behind this figure lies a different story: millions remain in poverty as some sub-sectors vital to daily life fall short. Water is scarce. Electricity shortages cripple businesses. Roads are crumbling. Tourism, a potential goldmine, remains stagnant.

These struggling sub-sectors—water supply, sewerage and waste management, electricity and gas, transportation, and tourism and hospitality—contribute little to the economy, leaving households and businesses in distress.

This is more than an economic slowdown. It is a crisis that threatens livelihoods, widens inequality, and raises urgent questions: Who is benefiting from this growth? And how long can Nigeria sustain an economy where essential services barely function?

Water supply, sewerage, and waste management: A nation thirsty for progress

One of the most underperforming sub-sectors is Water Supply, Sewerage, and Waste Management, which contributed a mere 0.18 percent to GDP in Q4 2024. Despite Nigeria’s vast water resources, access to clean water remains a severe challenge.

According to UNICEF, only 10 percent of Lagos residents have direct access to pipe-borne water, while over 60 million Nigerians resort to open defecation due to a lack of proper sewage infrastructure.

The World Bank estimates that less than 1 percent of Nigeria’s annual budget is allocated to water and waste management. As a result, waterborne diseases such as cholera continue to claim lives yearly, leaving millions without access to basic human needs.

Read also: How Nigeria can boost living standards as GDP per capita falls to all-time low

Electricity and gas: A nation in darkness

The electricity and gas sector, which should be a catalyst for industrialisation, contributed just 0.49 percent to GDP in Q4 2024, down from 0.54 percent in Q4 2023, according to the NBS. The power crisis in Nigeria remains a major constraint on economic growth.

The World Bank reports that Nigeria’s economy loses approximately $29 billion annually due to unreliable electricity. Despite being in the top four of Africa’s largest economies, Nigeria generates less power than small European cities like Lisbon or Warsaw.

Over 80 million Nigerians live without electricity, while those who have access receive an average of just eight hours of power daily, according to Nigeria’s Power Sector Recovery Plan. Manufacturers, unable to depend on the national grid, spend 40 percent of their operating costs on diesel generators.

Meanwhile, South Africa is making significant strides in renewable energy, while Nigeria remains stuck in a costly and inefficient power model. Without urgent reforms, industries will continue to collapse, foreign investors will withdraw, and job losses will escalate.

Transportation: The roads to nowhere

Transportation and logistics, a sector essential for trade and agricultural supply chains, has continued to struggle. In Q4 2024, its contribution to GDP fell to 1.10 percent from 1.61 percent in Q4 2023, according to the NBS.

The sector is plagued by poor road networks, an almost non-existent rail system, and soaring fuel prices. The Federal Ministry of Works and Housing estimates that 70 percent of Nigerian roads are in poor or impassable condition, making movement of goods and people increasingly difficult.

More so, the World Bank says most of Nigeria’s rural roads are in bad shape—only about 10-15 percent are in good condition. This makes transportation expensive and difficult, especially for farmers trying to sell their goods or people needing basic services. Poor road maintenance is also costing the country money and slowing down local development.

Additionally, Nigeria has just 3,500 km of functional railway tracks, far below what is required to support economic growth. The rising cost of fuel has tripled transportation expenses, forcing businesses and commuters to pay more.

The African Development Bank estimates that Nigeria loses over $10 billion annually due to inefficient logistics. The impact is felt most in food prices, as supply chain disruptions prevent farmers from getting their produce to markets efficiently, worsening food insecurity.

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Tourism and hospitality: The missed opportunity

The hospitality and food services sector, a potential goldmine for tourism, remained stagnant, contributing just 0.79 percent to GDP in Q4 2024, unchanged from Q4 2023, according to the NBS.

While countries like Kenya and South Africa earn billions from tourism, Nigeria remains largely excluded from this economic boom due to security issues, high operational costs, and weak domestic tourism.

The Nigerian Tourism Development Corporation (NTDC) reports that Nigeria earned just $400 million from tourism in 2023, compared to Kenya’s $2.3 billion. Frequent kidnappings and terrorist attacks discourage international visitors, while high taxes, unreliable electricity, and expensive fuel make running hotels and restaurants difficult.

With 65 percent of Nigerians living below the poverty line, domestic tourism remains weak, limiting growth in the sector. Without urgent measures to improve security and simplify visa restrictions, Nigeria will continue missing out on a $10 billion industry that could create millions of jobs.

Growth on paper, crisis in reality

Despite GDP growth of 3.84 percent in Q4 2024, up from 3.46 percent in Q4 2023, many Nigerians have yet to feel its impact. The Nigerian Economic Summit Group (NESG) projects that GDP growth could reach 5.5 percent by 2025.

However, an economist argues that growth rates alone are meaningless if they do not improve people’s lives. “Nigeria recorded growth rates above 20 percent in the early 1970s, yet poverty persisted,” he noted, emphasising that the focus should be on the quality of growth rather than just the figures.

Meanwhile, Bosun Tijani, Minister of Communications, Innovation, and Digital Economy, recently stated that Nigeria could soon become a trillion-dollar economy, with the ICT sector expected to contribute 21 percent of GDP.

An anonymous expert at the Nigerian Institute of Social and Economic Research (NISER) acknowledged that reaching a trillion-dollar economy would be a significant milestone.

However, they stressed that for economic expansion to truly benefit Nigerians, growth must be broad-based rather than concentrated in a few sectors while others remain stagnant.

Read also: Nigeria’s GDP per capita down to $835 in 2025 – IMF

What must be done to save these sectors?

Nigeria must urgently address the neglect of these failing sectors to ensure GDP growth translates into real progress. The government must invest in a Water Infrastructure Emergency Plan, increasing funding to ensure universal access to clean water by 2030.

The power sector needs structural reforms, with a focus on solar, hydro, and gas-powered electricity to reduce dependence on costly diesel. In transportation, at least $5 billion annually should be allocated to repair roads and expand rail networks.

Additionally, the tourism sector must be revitalised by enhancing security, reducing bureaucratic hurdles, and making Nigeria an attractive destination for international visitors.

Final thoughts: The cost of inaction

Nigeria’s economic debate often revolves around oil and banking, while essential industries that affect daily life remain ignored.

The underperformance of the water, electricity, transport, and tourism sectors is not just an economic issue—it is a humanitarian crisis. As other African nations modernise and diversify their economies, Nigeria risks being left behind.

Growth on paper means nothing if essential sectors continue to fail. Without urgent intervention, millions will remain trapped in poverty, and Nigeria’s economic future will remain at risk.