Nigeria’s headline economic growth has long been celebrated as evidence of its potential as an African powerhouse. Yet this celebration rings hollow for the millions of Nigerians left behind by a growth trajectory that stubbornly fails to translate into sufficient formal wage jobs. Beneath the rising GDP figures lies a stark disconnect between economic expansion and social prosperity, threatening to erode the very foundation of the country’s development narrative.
The World Bank has flagged Nigeria’s persistent inability to convert growth into jobs as part of a broader African trend. This failure, reflected in Nigeria’s job elasticity of 0.6 between 1991 and 2016, means that economic expansion only marginally lifts people out of poverty. Instead, a vast informal economy—employing over 80 percent of the workforce—dominates, offering little in terms of security or upward mobility. Millions of workers remain trapped as the “working poor,” labouring in an environment that provides neither stability nor hope for economic freedom.
Read also: Why Nigeria’s job market isn’t keeping up with economic growth
This is not a new phenomenon. Nigeria’s growth spurts in the 2000s, often hailed as transformative, were largely jobless, benefiting a small elite while bypassing the majority. As Tayo Aduloju of the Nigeria Economic Summit Group aptly observes, growth without systemic inclusion entrenches inequality, leaving the country’s economic potential unrealised.
“Millions of workers remain trapped as the “working poor,” labouring in an environment that provides neither stability nor hope for economic freedom.”
The Nigerian government cannot afford to continue its myopic focus on GDP growth at the expense of job creation. To break free from this cycle, it must chart a new course that actively prioritises employment and economic inclusion. This starts with targeted support for labour-intensive, export-oriented industries, which have the capacity to absorb a significant portion of the unemployed, particularly in rural areas.
Equally important is the empowerment of micro, small, and medium enterprises (MSMEs), the backbone of Nigeria’s economy. Access to affordable credit remains a significant hurdle for these businesses, preventing them from scaling into job-creating enterprises. Financial inclusion, as Central Bank Governor Olayemi Cardoso emphasises, is critical to unlocking this potential. Recent reforms aimed at strengthening Nigeria’s banking sector are a step in the right direction, but their success will depend on how effectively they translate into credit and financial services for underserved populations.
Nigeria’s fintech sector offers a compelling opportunity to bridge the gap between growth and inclusion. By leveraging digital solutions, fintech companies have brought millions of unbanked Nigerians into the financial system. Yet regulatory uncertainty looms as a significant obstacle. The government must adopt a balanced approach, providing oversight without stifling innovation, to ensure fintech’s transformative potential is fully realised.
Lagos State has taken notable steps in this regard, with initiatives like the Lagos State Science, Research, and Innovation Council fostering a culture of innovation and entrepreneurship. Such efforts highlight the critical role states can play as economic enablers. However, this model is far from universal. In contrast, some states remain wedded to outdated models of state ownership, exemplified by Benue’s recent attempt to revive a dormant juice company through direct government control—a policy relic that has historically stifled growth and innovation.
If Nigeria is to achieve inclusive and sustainable growth, it must abandon policies that centralise economic power and instead embrace a model that devolves opportunities to its people. Partnerships between government, private investors, and local communities must be fostered to create a dynamic, job-rich economy. Transparency, as industry leaders like Barth Nnaji have stressed, is non-negotiable in this effort. Investors need clarity and consistency, not bureaucratic hurdles and corruption.
The stakes could not be higher. With inflation eroding purchasing power and unemployment fuelling discontent, the cost of inaction is far greater than the price of reform. Nigeria’s economic future hinges on its ability to make growth more inclusive, turning prosperity into a shared reality rather than a fleeting statistic.
Read also: Japa: Nigerian youths urged to focus on local opportunities for economic growth
For too long, Nigeria has prioritised economic growth without addressing the structural inequities that keep millions in poverty. The time has come for a fundamental shift—one that places jobs, financial inclusion, and private-sector dynamism at the heart of the nation’s development strategy.
By investing in education, healthcare, and infrastructure, the government can create a skilled workforce, improve productivity, and attract foreign investment. Furthermore, addressing corruption and promoting transparency can enhance public trust and stimulate economic activity. Only through such transformative measures can Nigeria fulfil its promise as Africa’s largest economy, not just in size, but in shared prosperity.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
