The quest for state competitiveness in Nigeria

A state’s potential lies not merely in its resources but in the power of a clear and cohesive vision to unlock opportunities.

– Dr. Brian Reuben

Nigeria, Africa’s most populous nation, brims with potential. Its vast natural resources, youthful population, and cultural diversity provide an enviable foundation for development. However, the country’s uneven economic landscape reveals the stark differences in growth and competitiveness across its 36 states and Federal Capital Territory. Enhancing state competitiveness is not just an aspiration—it is a necessity for sustainable economic progress. Competitiveness, defined as the ability of a state to attract investment, create jobs, and foster innovation, is the cornerstone for building resilient economies that can thrive amidst global and local challenges.

Why state competitiveness matters

Competitiveness is critical in safeguarding states against economic vulnerabilities. The 2015-2016 recession in Nigeria exposed the dangers of overdependence on single industries. Oil-dependent states like Bayelsa and Rivers faced severe fiscal crises as global oil prices plummeted, leaving their economies in disarray. In contrast, states like Lagos, with its diversified services sector, and Ogun, known for its robust industrial base, weathered the storm more effectively.

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This disparity highlights the importance of economic diversification. States that proactively develop multiple economic sectors can withstand external shocks and sustain long-term growth. Kaduna State, for example, has demonstrated the power of strategic diversification. By investing in agriculture, renewable energy, and mining, Kaduna is building an economy less reliant on federal allocations. Initiatives such as the Kaduna State Education Development Programme, which focuses on improving human capital, underline the pivotal role of education in fostering competitiveness.

Learning from Lagos and Ogun states

Lagos State exemplifies the rewards of visionary leadership and strategic planning. Contributing over 30 percent of Nigeria’s GDP, Lagos attracts the highest levels of foreign direct investment in the country. Projects like the Lekki Free Trade Zone, which houses the multi-billion-dollar Dangote Refinery, reflect Lagos’s commitment to creating investment-friendly environments. By positioning itself as a trade and logistics hub for West Africa, Lagos has successfully generated jobs, increased revenue, and enhanced its global reputation.

Ogun State, strategically located next to Lagos, offers another compelling model. Ogun has leveraged its proximity to Lagos to build a thriving industrial base. Recognising the value of collaboration, Ogun’s leadership has worked closely with Lagos to share resources and infrastructure. Initiatives such as industrial parks, improved road networks, and streamlined business regulations have attracted major companies like Procter & Gamble and Nestlé to Ogun. This strategic approach underscores the importance of regional cooperation in driving economic growth.

 “By equipping young people with relevant skills, states can address unemployment while fostering innovation and entrepreneurship.”

Kano: Reviving a historical economic hub

In northern Nigeria, Kano State’s journey illustrates both the opportunities and challenges of competitiveness. Once a vibrant centre for textile production, Kano’s economy declined due to infrastructure deficits, unreliable electricity, and competition from imported goods. Recent efforts to revive Kano’s economy have focused on agriculture, small-scale manufacturing, and trade.

The Kano Agro-Pastoral Development Project exemplifies these efforts. By providing modern farming equipment, seeds, and market access, the project aims to enhance agricultural productivity. Public-private partnerships have also attracted foreign investment in agriculture, positioning Kano as a potential hub for agro-processing and trade. However, persistent challenges like insecurity and inadequate infrastructure underscore the need for comprehensive strategies to sustain competitiveness.

Human capital: The foundation for competitiveness

Human capital development is a critical driver of state competitiveness. States that invest in education, vocational training, and healthcare create a skilled and healthy workforce capable of driving innovation and productivity. Edo State’s EdoBEST education reform initiative highlights the transformative impact of such investments. By integrating digital teaching tools and continuous teacher training, Edo has improved learning outcomes at the primary and secondary levels, laying a solid foundation for future economic growth.

Youth employment is another area where states can make significant strides. Skills development programs in high-growth sectors such as agriculture, technology, and manufacturing can help bridge skill gaps and create opportunities for Nigeria’s large youth population. By equipping young people with relevant skills, states can address unemployment while fostering innovation and entrepreneurship.

Infrastructure as the backbone of competitiveness

Infrastructure development is central to creating competitive economies. Many Nigerian states face significant infrastructure gaps, particularly in transportation, energy, and digital connectivity. States that prioritise infrastructure investment not only improve business conditions but also attract investment and create jobs.

Akwa Ibom State’s Ibom Deep Seaport and Industrial City project illustrates the transformative power of infrastructure. Positioned along the Gulf of Guinea, this project aims to establish Akwa Ibom as a logistics and trade hub for West Africa. By complementing this initiative with investments in renewable energy and industrial zones, the state is creating an enabling environment for industries that can add substantial value to its economy.

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Similarly, Cross River State’s “Calabar Smart City” project demonstrates the potential of technology-driven infrastructure. By developing a digital backbone for businesses and fostering innovation hubs, Cross River is positioning itself as a leader in the digital economy. Such forward-thinking initiatives highlight the importance of aligning state strategies with global economic trends.

Agriculture: A natural path to competitiveness

Agriculture remains a cornerstone of Nigeria’s economy, and states that prioritise this sector can unlock significant economic opportunities. Kebbi State’s success in rice production, supported by the federal government’s Anchor Borrowers’ Program, exemplifies this potential. By providing financing, equipment, and training, Kebbi has increased rice production, reduced Nigeria’s reliance on imports, and improved local incomes.

Anambra State’s focus on high-value crops such as cassava and palm oil further demonstrates the benefits of agriculture-driven competitiveness. By supporting small-scale farmers and processors through programs like the Anambra Small Business Agency, the state has created a sustainable agricultural base that contributes to economic stability.

Innovation: The future of competitiveness

The global economy is shifting toward knowledge-driven industries, and Nigerian states must embrace innovation to remain competitive. Ekiti State’s digital economy initiative, which supports tech startups and fosters entrepreneurship, is a step in this direction. By investing in digital infrastructure and promoting digital skills training, Ekiti is creating an ecosystem that supports technology-driven growth.

Innovation is not limited to technology. States can also adopt innovative approaches to traditional challenges. Jigawa State’s investment in off-grid solar projects to improve rural energy access exemplifies this. By addressing energy challenges in rural communities, Jigawa is enhancing productivity and supporting small businesses, demonstrating that innovation can be a catalyst for growth in diverse sectors.

Collaboration: A key to success

State competitiveness also depends on collaboration—among states, with the federal government, and with private and international partners. Regional alliances can amplify the impact of individual states’ efforts by pooling resources, sharing knowledge, and creating economic clusters.

The Lagos-Ibadan railway project, a collaboration among southwestern states, highlights the benefits of regional integration. Similarly, agricultural partnerships between Benue, Nasarawa, and Plateau states demonstrate the potential of collective action in building competitive regional hubs.

Toward a competitive and resilient Nigeria

Competitiveness is not a destination but a journey. Nigerian states must adopt targeted economic strategies, invest in infrastructure, and foster innovation to unlock their potential. However, achieving sustainable competitiveness requires addressing foundational challenges such as governance, security, and human capital development.

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By embracing these principles, Nigerian states can build resilient economies capable of withstanding external shocks and driving inclusive growth. The quest for state competitiveness is challenging, but with visionary leadership, strategic planning, and collaborative action, Nigerian states can achieve sustainable development and contribute to a stronger, more prosperous nation.

Dr Brian O. Reuben is the Executive Chairman of the Sixteenth Council