Nigeria, Africa’s most populous nation, sits at a critical crossroads. With over 220 million people and projections suggesting that its population will double by 2050, the country holds what should be an enviable demographic advantage. Instead, it finds itself grappling with one of the highest unemployment rates in the world, spiralling inflation, and a stagnating economy unable to absorb its swelling labour force. What should be a tale of a youthful nation driving innovation and prosperity is devolving into a narrative of squandered potential and deepening despair.
As Nigeria’s population balloons, so too does its share of the world’s poor. By 2030, over 80 percent of the global population living in extreme poverty is expected to be African, with Nigeria leading the pack. The stakes are high not only for Nigeria but for the entire continent, which has yet to seize its demographic moment. Unlike Asia, where rapid population growth fuelled transformative economic gains, Africa risks becoming a cautionary tale of missed opportunities.
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Africa’s economic trajectory is diverging sharply from the rest of the world. In 1960, Nigeria’s GDP per capita rivalled that of South Korea. Today, South Korea’s GDP per capita is more than 20 times higher, a damning indictment of Nigeria’s failure to evolve from a resource-dependent economy to one driven by manufacturing, services, and innovation. The Economist describes this divergence as a “crocodile gap”: one line on the graph climbing steeply (Asia), the other crawling along (Africa).
Nigeria’s overreliance on oil revenue has left it vulnerable to the boom-and-bust cycles of commodity markets. The industrial sector remains underdeveloped, employing just 12 percent of the workforce, while agriculture, characterised by outdated techniques and low productivity, dominates. Over half of Nigerians work in agriculture, yet yields are among the lowest globally, with less than 5 percent of arable land irrigated. These structural weaknesses are compounded by a chronic power crisis, with businesses losing an average of 25 days of activity annually to power cuts. In Lagos, the commercial capital, urbanisation is driven less by economic opportunity and more by desperation—a search for survival in overcrowded slums rather than thriving industrial hubs.
Nigeria has skipped the transformative industrialisation that propelled East Asia to prosperity. While countries like Vietnam and Bangladesh used their demographic booms to drive export-orientated manufacturing, Nigeria has largely bypassed this stage. Instead, urbanisation has occurred without industrialisation, leading to a proliferation of low-productivity informal jobs rather than formal employment in high-value sectors. According to McKinsey, service-sector productivity in Africa is less than half that of Latin America and even lower than in India.
“Public spending prioritizes debt servicing over critical investments in health, education, and infrastructure.”
The education system—a critical enabler of economic transformation—has failed to prepare Nigeria’s youth for the demands of a modern economy. Literacy rates hover at 75 percent for 15-to-24-year-olds, well below the 90 percent average in other developing regions. More alarmingly, 60 percent of Nigerian adolescents are not in school, perpetuating a vicious cycle of low skills, low productivity, and low incomes.
Nigeria’s governance challenges are at the heart of its economic malaise. Successive administrations have relied on rent-seeking and short-term populism rather than undertaking the structural reforms necessary to diversify the economy and create jobs. Public spending prioritizes debt servicing over critical investments in health, education, and infrastructure. In 2022, Nigeria spent more on debt repayment than on these essential sectors combined.
Corruption and inefficiency further exacerbate the situation. Policies aimed at industrialisation often flounder due to mismanagement, while foreign investors are deterred by the country’s unpredictable regulatory environment. The result is an economy stuck in limbo, unable to harness its abundant human capital or attract the scale of investment needed for transformation.
Despite the dire outlook, Nigeria’s demographic boom still holds potential—but only if urgent and bold action is taken. The African Continental Free Trade Agreement (AfCFTA) presents a unique opportunity to create larger markets that can support industrialisation and intra-African trade. However, trade agreements alone will not suffice without foundational investments in infrastructure, education, and energy.
Nigeria must focus on agricultural modernisation as a springboard for broader economic transformation. By adopting technology and improving supply chains, the sector can become more productive, reducing food insecurity and freeing labour for industrial and service sectors. Concurrently, targeted investments in manufacturing and technology hubs could help absorb the growing workforce while positioning Nigeria as a regional economic leader.
Above all, the country’s leadership must abandon the myopia of rent-seeking politics. Governance reforms to reduce corruption, streamline bureaucracy, and ensure policy consistency are essential to rebuilding investor confidence. Additionally, rethinking fiscal priorities to allocate more resources to human capital development will pay dividends in the long run.
Nigeria is alarmingly close to disaster. Its demographic explosion could either propel it toward prosperity or plunge it deeper into poverty and instability. The difference lies in whether the country’s leaders can rise to the challenge.
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History offers sobering lessons: nations that fail to harness their demographic dividends often descend into prolonged crises of unemployment, unrest, and economic decline. Examples abound: countries with rapidly growing populations that neglected investments in education, healthcare, and job creation often experienced social unrest, political instability, and even violent conflict. This path, fraught with peril, must be avoided at all costs.
Africa’s century will remain an aspiration unless its most populous nation takes bold steps to lead the charge. Nigeria has the potential to be a beacon of hope for the continent, demonstrating how to transform a youthful population into a powerful engine of economic growth.
By embracing innovation, fostering entrepreneurship, and investing in its people, Nigeria can not only overcome its current challenges but also inspire other African nations to follow suit.
The question remains: Will Nigeria’s leaders seize this moment, or will they let the crocodile gap widen further? The choice is theirs, and the consequences will reverberate throughout the continent.
The time to act is now. Delay will only deepen the crisis and diminish the chances of a brighter future for Nigeria and Africa as a whole.
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