Nigeria is a middle-income country with an emerging market and a mixed economy. It has expanding manufacturing, service, financial, technology, communications, and entertainment departments. Yet, the country is still faced with some economic problems.
The economic problems in Nigeria have always been a topic of discussion in schools, social platforms, and even the national assembly. But then, everyone knows what the main problem is.
It is because the citizens and leaders have always failed to make things right in both rules of governance and law. If our country continues this way, then economic growth will continue to be a dream.
What are 10 economic problems facing Nigeria economy?
Here is a list of problems in Nigeria and solutions:
1. Lack of interaction between the government and society
The problem is standing in the first row, among other basic economic problems facing Nigeria. The government will not be able to manage its economic, political, and social affairs without fostering interaction between it and the private sector and state civil society.
Therefore, the government should include processes and mechanisms for citizens and groups to articulate their interests, mediate their differences, and work together.
Good leadership will provide an enabling environment for people to enjoy quality governance and justice. Good governance starts with us; we are also responsible for this situation in the country.
Granted, corruption is a global menace, but Nigeria suffers most of all. People are starting to see that this nation has a corrupt culture. For many years, Nigeria has earned a considerable sum of money from the rock-tar, which has gone down the cesspool that was created by corruption.
Being the oil giant, which runs on the grease of politics, Nigeria could be characterized as a wealthy nation staying afloat on oil. However, the problem is that money from oil does not flow to the people.
The top public officials are wealthy because they hide behind the falsehood that public money belongs to no one. The national news is full of information on how public officials are buying million-dollar mansions and accumulating stolen public funds in financial establishments abroad.
The lack of consistency and the politicians' greed are among the causes of the hemorrhage in the economy. Every administration, which comes on board, sets up a new policy initiative instead of working on the previous one. Consequently, Nigeria has a series of inefficient and poorly executed policies.
In 2003, the federal government, under the administration of President Olusegun Obasanjo established the National Economic Empowerment and Development Strategy (NEEDS).
This programme headed by the former CBN governor, Prof Charles Soludo, was aimed towards sustainable growth and poverty reduction in the country. However, the programme failed to reach its objective.
The late administration of Umaru Musa Yar'adua discarded the needs of the people. His administration created a plan to convert Nigeria into one of the top 20 biggest global economies by 2020.
So, this program, which now seems to be dead, has gulped a considerable sum of money, which could have been used to solve some of the political and social-economic challenges facing Nigeria at the time.
4. Poor human development
In general, human resources play a significant role in the success or failure of any nation or organization. Most of the problems facing the Nigerian economy reflect the bad quality of the nation's economic health and human development.
This is a situation that has been abandoned for many years. The problems facing educational institutions directly influence the issues in the country's economy. The situation will continue to be terrible if the nation remains on the same undeveloped level as it is now.
5. Nature of the market
A lack of authentic competition in the system is among the problems facing the economy. Market forces guide actual capitalistic economics. The self-regulating character of the market defines where one works and lives, how much one earns, and what he/she can buy.
By the way, each economy needs some form of government interference. But we are not talking about a monopoly. Good market governance must work hand in hand with healthy competition. Unfortunately, Nigeria is not among the countries where these two exist in one dimension.
In Nigeria, the federal government has a valid monopoly of setting the price of products and other services and goods. In 2016, the federal government randomly increased the cost of fuel without paying attention to the negative distributive effects on the Nigerian economy. Although in the early part of 2020, the price of petroleum was reduced.
6. Crime and terrorism
These two issues also negatively influence the economic situation of the country. The Nigerian crime issue gives many people in this country sleepless nights. In some places, people feel that they cannot walk around their neighborhoods freely anymore.
Public security is an essential aspect of every state, and Nigeria has failed in this respect. As for terrorist attacks, they are now on the rise in Nigeria, which is the result of Boko Haram activities over the past years.
Different violent events such as bombings, kidnappings, and others don't give the Nigerians a feeling of safety. What is Nigeria rank in the world? The Global Peace Index ranked Nigeria as the 16th least peaceful country in the world
Boko Haram is a famous agent of demolition in Nigeria. You must have heard of Boko Haram's kidnappings of hundreds of children, mostly girls (about 276 Chibok schoolgirls) from villages and schools in Northern Nigeria in 2014.
They were between 17 and 18 years old. These girls were secondary school pupils at the Government Secondary School, Chibok, Borno State, in Nigeria. In the Northern part of Nigeria, pupils cannot finish their studies due to the looming threat of murder and kidnapping.
Unemployment is one of the most damaging problems of Nigeria, and many people are disappointed due to widespread joblessness.
It seems like we are going round in circles. Unemployment is high due to the economic recession, and we have a tough economic situation due to the high rate of unemployment. We need to break out of this vicious cycle.
According to reports by the National Bureau Statistics (NBS), in 2019, the rate of unemployment in Nigeria was 23.1%, and the underemployment rate was 16.6%.
Additionally, it is stated that the rate of unemployment for Nigeria is 32.5 per cent in 2021. This figure is projected to increase further in 2022, with implications that are better imagined if the country's current economic challenges are not urgently reversed.
Furthermore, due to the high level of unemployment, in March 2014, 16 people were killed in a scuffle when 500,000 despairing job-seekers were hurrying to apply for about 5,000 vacancies in the Immigration Service of Nigeria.
Students, after graduating from higher educational institutions, often face low morale due to joblessness. A lot of Nigerian graduates were not even able to acquire useful skills during their education process.
They were busy reading textbooks without having an opportunity to practice what they read. That is why they apply for jobs, and they are not hired due to the lack of specialized skills.
As a result, graduates usually stay in their parents' homes for a long period, with mounting pessimism and frustration. It is one of the leading causes of crime among young people.
They turn to unconscionable activities because there is nothing else except to generate income or occupy their time. Annually, about 500,000 students graduate from different universities, but most of them cannot find a job.
8. Education and university systems
These days, corruption has also spread to the Nigerian educational system, especially in universities. Professors are used to taking money from students in exchange for good marks.
Some students even say that they have to bribe university executives to have their exam results submitted and compiled for the National Youth Service Corps.
Not too long ago at the Rivers State University, a renowned professor was sacked for extorting money from his students to improve their grades. This is a true reflection of the state of things in most universities across the country today.
The higher institutions and universities in this country are not in shape. The facilities that are needed to adequately teach students so that they can be useful to companies after graduation are missing. Too much theory in our educational institutions and a total lack of practice is a big issue.
Many companies have appealed to the Federal government to make sure the necessary tools are accessible to enable the students that specialize in the area to be fully prepared.
9. Environment and health issues
The health and environmental standards of the country are in deplorable condition. In 2015, Amnesty International announced that Nigeria experiences hundreds of oil spills annually in the Niger Delta, mainly because of sabotage, pipe erosion, and uncaring attitude by oil firms. This is also responsible for the hike in oil prices.
Oil spills wilt the soil nutrients and other essential elements. This weakening can damage the communities that farm and fish in the Niger Delta and the general economy.
Litters and waste products are strewn all over the streets and roads in Nigeria. Improperly disposed rubbish promotes the spread of diseases, and this will end up affecting the Nigerian economy.
Another main problem facing the country's economy is the health issue. People suffer from a lack of medicines and inexperienced doctors with bad education. What is more, corruption abounds in this area? In our country, if you have no money, you will not get proper treatment.
Infrastructure may seem like a simplistic point compared to other issues like Boko Haram, but how can a country develop without a dependable power supply? The power department is mismanaged and corrupt, and a lot of workers in the electricity department are not equipped with the proper training or skills.
In general, domestic production suffers in these kinds of conditions, and a lot of foreign companies also find it hard to invest their business in Nigeria due to the constant power failures. This challenge keeps the country on the list of Third World countries annually.
What are the economic problems in Nigeria?
Most economic analysts focus on the socio-political ones like nepotism, terrorism, deficiency of patriotism among the people, and poor leadership when discussing Nigeria economic problems and solutions to them.
However, another school of thought believes that the fundamental Nigeria problems as they relate to the economy are unemployment, corruption, devaluation of the national currency, poor infrastructure management, and disproportional taxes and benefits.
What are the factors affecting Nigeria economy?
The major factors hurting the Nigerian economy include inflation, unemployment, government policy, monetary policies, inadequate infrastructures and power supply, inadequate health facilities, insecurity, ineffective leadership and corruption, and over-reliance on oil.
These factors have significantly contributed to the economic problems in Nigeria today and solutions lie in good leadership, accountability, education, paying of taxes, employment, and security.
What are the benefits of economic growth?
The economic growth in the country will only lead to economic development, and would also result in certain benefits, including lower unemployment, higher average income, improved public services, investment, increased research and development, improved public facilities and lower government borrowing.
Furthermore, people would be afforded great opportunities to work in the manufacturing, agricultural and other sectors of the economy.
Considering the different economic problems in Nigeria, the unfortunate thing is that all of them are interconnected and interdependent. If there will be real change, everyone must play their part. Our future is in our hands.
DISCLAIMER: This article is intended for general informational purposes only and does not address individual circumstances. It is not a substitute for professional advice or help and should not be relied on to make decisions of any kind. Any action you take upon the information presented in this article is strictly at your own risk and responsibility!
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