My take on the recently revised GDP figures in Nigeria for African Arguments titled Nigerias Economic Transition Reveals Deep Structural Distortions Excerpts: According to the rebased figures, six sectors now account for 70% of nominal GDP rather than three in the old series. The service sector grew fastest, by 240%, and is progressively constituting a larger portion of the GDP. Conversely, the share of the two hitherto giants – agriculture and oil has fallen to 21% and 14.4% respectively. Nigeria is transiting to a services-driven economy due to the rapid growth of information and communications technology (ICT), banking, trade and the informal economy... On the surface, the emergence of the service sector as a major growth driver indicates a greater diversification of the country’s production structure away from oil (a long sought after goal). The share of the oil and gas sector has fallen from 32.4% of GDP in the old series to just 14.4% in the new series. On one hand this is good news, on the other hand, it reveals deeper structural distortions. Nigeria appears to be leap-frogging from an extractive to a services-oriented economy without commensurate industrial development, and this comes with some baggage. This slow pace of industrialisation accounts for the non-inclusive nature of growth and widening inequality in the country.... ...In Nigeria, as the new GDP series reveals, this industrialisation process is yet to take root. The manufacturing sector, which was 10% of GDP in 1980, constitutes only 6.9% in the revised figures. By contrast, the over 200-fold growth in ICT, trade and financial services means that the service sector now constitutes 52.3% of economic output. Unlike the manufacturing sector, which employs low-skilled, low-wage labour, these services are highly capital and technology intensive. Entry-level staff in banks in the country require a minimum of a tertiary qualification. While the mobile tech start-up revolution sweeping across the commercial capital Lagos, is dominated by tech-savvy entrepreneurs with a highly specialised skill set. Therefore, the mobile revolution hasn’t led to an explosion of job opportunities, as youth unemployment persists at 54%. A stark reminder of the unemployment situation is the recent recruitment exercise of the immigration service, in which 6.5 million Nigerians applied for 4,000 jobs and where 19 people were crushed to death at stampedes at the recruitment centres. Read the rest of the article here: africanarguments.org/2014/05/01/nigerias-economic-transition-reveals-deep-structural-distortions-by-zainab-usman/
Posted on: Thu, 01 May 2014 10:17:12 +0000
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