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The Nigerian Economy: Peeping Out of the Woods (Reviewed, 10th May 2001) Tell your friends about this page! Email it to them.

With a Gross National Product, GNP, of some $38 billion, the size of the Nigerian economy is undeniably small. Given a population of 123 million according to World Bank figures, the per capita income comes down to a paltry $310. Not much to get by with, evidently. The country’s infrastructure is down, power supply is epileptic, the roads are chaotic and queues at petrol stations are long-winding, though the country is among the largest producers of crude oil in the world.

Marina, Lagos, Nigeria's foremost business districtAnd yet. Scratch beneath the gloomy surface and the picture is a lot brighter. That goods and services are so terribly made – if at all – turn out to be both curse and opportunity. Curse for the Nigerians who have to trudge through life in such desperate straits, but opportunity for anyone who could produce the goods or services with a modicum of efficiency.

Therein lie the vast opportunities and allures of the Nigerian economy. Whole swathes of the economy offer unbelievable opportunities for making good money. According to figures from the International Finance Corporation, IFC, the Nigerian stock market has consistently outperformed returns on investment in emerging markets in the past few years. In the informal sector – where, anyway, most of the economy is – returns are even much greater.

"According to figures from the IFC, the Nigerian Stock Market has constantly outperformed returns on investment in emerging markets in the past few years"

That things can only get better is indicated by the economic moves of the new civilian government of President Olusegun Obasanjo. After 15 years of rampaging generals who ruled – and ruined – the country, the new government seems to understand what needs to be done, and is making bold moves to do them. Cleaning the mess left behind by years of military pillage won’t be easy, but a credible campaign against corruption is being waged. The refineries are being repaired. The economy is being opened up, and foreign direct investment is starting to pour in. Privatisation of the worst-run state firms is being pursued with relentlessness. This last point bears some emphasis. The current exercise, unlike some that went before it, and unlike in places like Russia, is seen as clean and transparent. There is a frenzy of competition from both local and foreign bidders to buy the companies being sold.

Besides the state firms being privatised, new ones, especially foreign ones are on a long queue to explore opportunities in wide areas: Enron in power, Citibank & Standard Chartered Bank in financial services and a whole lot of others in water, agro-allied, construction and, of course the flagship sector of oil and gas. Telecoms and IT need special mention because the country has one of the lowest telephone access per person in the world – less than 4 in every 1000 persons. With serious government commitment to a viable telecoms policy, it is expected that with so many people in need of phone lines, any investment in this area - and indeed many foreign telecoms giants are lining up – would be especially lucrative.

These companies bring much needed, but also much profitable services. Above all, they bring a verdict: that the Nigerian economy has future.

Picture: Marina, Lagos, Nigeria's foremost business district

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