BCG states five actions to unlock potentials of Nigeria’s economy

IMPROVING Nigeria’s infrastructure through prioritized investments will help to secure its long-term success as Africa’s largest economy, according to a new report by The Boston Consulting Group, BCG.
Tagged: ‘Unlocking Nigeria’s Potential: The Path to Well-Being’, was released yesterday and coincided with the opening of BCG’s new office in Lagos.
The report identifies infrastructure, education, health, governance, and civil society as areas that require immediate attention, and outlines the root causes of these challenges and series of actions that can drive meaningful progress.
The most critical focus, the report says, must be addressing Nigeria’s weak infrastructure – doing so will enable the country to make much-needed progress in the other key areas and diversify sources of foreign exchange.
Senior Partner and Chairman of BCG’s Lagos office and a coauthor of the report, Luis Gravito said “Economic pressure, including low oil prices, a possible recession, and a declining naira, make it imperative that the country move quickly to address major gaps – and infrastructure should be priority one.
“Swift and disciplined action will allow Nigeria to fully harness its vast resources and potential, most notably its vibrant and entrepreneurial population.”
The value of Nigeria’s infrastructure stock is about 35% of GDP, compared with an average of about 70% for large economies. A key reason for the shortfall: Nigeria invested just $664 per capita (adjusted for purchasing-power parity) in infrastructure annually from 2009 to 2013, or 3% of GDP, compared with an average of $3,060, or 5% of GDP, for several peer countries. Without decisive intervention, that gap is likely to widen.
Principal in the Lagos office and a coauthor of the report, Dr. Wiebe Boer said “Nigeria must address major gaps, from the power generation, transmission and distribution network, to roads and railway, sanitation systems, and technology infrastructure.
“These issues have major ripple effects, including impacts on health and on the country’s ability to diversify its economy, expand its pool of tradable goods, and create badly needed jobs.”
The report outlines five concrete actions to address the infrastructure issues: establishment of a central body empowered to oversee and direct the entire life cycle of infrastructure investments; the identification of ten high-priority infrastructure projects; international road shows by the government to line up private funding, including foreign direct investment, for those projects; initiatives to ensure flawless execution of the ten projects in order to generate early wins; and leveraging momentum to launch a sustained infrastructure-building drive.
The report bases its analysis on BCG’s Sustainable Economic Development Assessment, SEDA, the firm’s globally recognised diagnostic tool for evaluating the relative well-being (the standard of living) of countries around the world, and on interviews with Nigerian executives in sectors such as energy, banking, and telecommunications.
Nigeria ranks 142nd out of the 149 countries in the SEDA data set when it comes to converting wealth (as measured by GDP per capita) into well-being, putting the country just ahead of Libya and Angola and behind Swaziland and Pakistan.

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