Despite Nigeria’s GDP growth reaching 3.84 percent in Q4 2024, millions remain impoverished due to underperformance in essential sectors such as water supply, electricity, transportation, and tourism. These sub-sectors are crucial for daily life and economic stability but face severe challenges, contributing minimally to GDP and exacerbating poverty. Urgent reforms and investments are necessary to address these issues to ensure that economic growth benefits all citizens.
Nigeria’s recent GDP growth of 3.84 percent in Q4 2024, the highest since the post-COVID recovery, masks the persistent poverty that affects millions. The stagnation in key sub-sectors such as water supply, electricity, transportation, and tourism underscores the limitations of this growth, as inadequate infrastructure and services lead to widespread hardship.
Access to clean water is a critical issue, with the water supply and waste management sector contributing merely 0.18 percent to GDP. Despite Nigeria’s abundant water resources, UNICEF reports that only 10 percent of Lagos residents enjoy piped water, while many resort to open defecation due to inadequate sewer systems. Consequently, millions are susceptible to waterborne diseases, highlighting the sector’s urgent need for investment.
In the electricity and gas sector, which generated only 0.49 percent of GDP in Q4 2024, inadequate power supply remains a major hindrance to economic development. Nigeria suffers an annual loss of $29 billion due to unreliable electricity, affecting more than 80 million citizens without access to consistent power. The reliance on costly diesel generators for manufacturing further escalates operational costs.
Transportation and logistics are crucial for trade yet experienced a GDP decline to 1.10 percent in Q4 2024. Challenges include poor road conditions and limited rail infrastructure, exacerbated by high fuel prices that diminish accessibility and increase transportation costs for goods and consumers, particularly impacting farmers. Nigeria’s losses in logistics efficiency amount to over $10 billion yearly, contributing to food insecurity.
The hospitality and tourism sector remains stagnant, contributing just 0.79 percent to GDP despite its potential. Nigeria’s tourism earnings of $400 million in 2023 starkly contrast with Kenya’s $2.3 billion, primarily due to security concerns and high operational costs. The local market’s struggles with poverty hinder domestic tourism growth, preventing the sector from flourishing.
Economic growth figures alone do not equate to improved living standards for many Nigerians, as indicated by the bleak realities in critical sectors. Growth projections, while optimistic, focus on broadening benefits across all sectors to prevent deepening economic disparities. A holistic approach is vital for sustainable and inclusive progress.
To revitalize these sectors, Nigeria must shift focus to vital infrastructure investments in water, electricity, transport, and tourism. Implementing a Water Infrastructure Emergency Plan, structural reforms in the power sector, and significant investment in transportation are imperative. Major enhancements in tourism security and procedural efficiency are also necessary to attract visitors.
The disregard for these essential services highlights a humanitarian crisis rather than just a financial one. Failure to act may hinder Nigeria’s competitiveness and leave millions in poverty, threatening the future stability of its economy. Without immediate commitment and resources toward these struggling sectors, sustainable growth remains elusive.
In conclusion, while Nigeria has experienced impressive GDP growth, the deep-rooted issues in critical sectors, including water, electricity, transportation, and tourism, pose significant threats to economic stability and living standards. To ensure growth translates into tangible benefits for all citizens, targeted interventions and investments are urgently required. Addressing the neglect in these sectors is not only an economic imperative, but also a social necessity to combat poverty and enhance quality of life for millions.
Original Source: businessday.ng
