What are the 10 economic problems that Nigeria is facing?

What are the 10 economic problems that Nigeria is facing?

The list of problems in Nigeria is quite extensive, as is the case with numerous other developing countries. Issues touching on education, health, infrastructure, and social wellbeing have consistently hampered development in Nigeria. While some of these problems are gradually reducing, others are getting worse. What are the current economic issues in Nigeria and what can be done about them?

solutions to economic problems in Nigeria
An image of the Nigerian map and flag colours. Photo: pixabay.com, @GDJ
Source: Depositphotos

Today's problems of economic development in Nigeria are quite varied. They include government-related issues, social problems, and issues arising from individual behaviour. We take a look at Nigeria's economic problems and solutions.

The list of problems in Nigeria

Here is a look at the current problems in Nigeria and their solutions.

1. State-society gap

The state-society gap is the divide that exists between a country's government and its citizens. Typically, a government cannot manage its economic, political, and social affairs without fostering interaction between it, the private sector, and other social groups.

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The state-society gap is particularly wide in Nigeria. At times, the citizens feel as if the government is inaccessible and has a poor idea of what is required on the ground. This leads to other problems, further worsening the country's economic situation.

Possible solutions

Here are some of the steps that can be taken to reduce the state-society gap.

  • Create bodies to determine what society needs.
  • Encourage society-state interaction through constant feedback
  • Decentralize governance to get it as close to the people as possible

2. Corruption

Economic problems in Nigeria
Money and a credit card. Photo: pixabay.com, @Mayya666
Source: UGC

Granted, corruption is a global menace. Still, it is quite prevalent in African countries, Nigeria included. For many years, Nigeria has earned a considerable sum of money from its natural resources, such as gas and oil, with a considerable portion going down the cesspool created by corruption.

Basically, a considerable portion of the money the country earns finds its way into the pockets of a few, leaving millions impoverished. As a result of corrupt leaders, Nigerian society has gradually become more and more corrupt. There are numerous institutions and departments where one cannot be served without parting with a bribe. This has made the menace one of the biggest problems facing Nigeria today.

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Possible solutions

How can Nigerians deal with corruption? Here are some possible anti-corruption measures.

  • Reform public administration and finance management and strengthen the role of auditing agencies.
  • Provide incentives for the general population to report cases of corruption.
  • Create pathways that give citizens relevant tools to engage and participate in their governments.
  • Create, fund, and strengthen the bodies that prosecute corruption cases.
  • Promote transparency and access to information

3. Inconsistent economic policies

The lack of consistency and the politicians' greed are among the causes of the haemorrhage in the economy. Every Nigerian 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.

For example, in 2003, the federal government, under the administration of President Olusegun Obasanjo, established the National Economic Empowerment and Development Strategy (NEEDS).

This program was headed by the then CBN governor, Prof Charles Soludo. It was as aimed toward sustainable growth and poverty reduction in the country. Obasanjo's successor discarded the program and prioritized a new one to make Nigeria one of the top 20 global economies by 2020.

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So, the NEEDS 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.

Possible solutions

Here are some possible solutions to this problem.

  • Have transition bodies that ensure continuity of policies between regimes.
  • Have policies set in structures that cannot be changed by individuals
  • Give the population ownership of some of the beneficial economic policies. This way, they will be safeguarded regardless of the regime in power.

4. Poor human capital development

current economic issues in Nigeria
Happy employees. Photo: pexels.com, @Christina Morillo
Source: UGC

Human capital plays a significant role in the success or failure of any nation or organization. Much of the problems facing the Nigerian economy reflect the bad quality of the nation's human capital. This is a situation that has been overlooked for many years. The problems facing educational institutions influence the country's workforce.

In developed nations, the rate of human capital development is quite high since there are guaranteed rewards for self-improvement in terms of skills, knowledge, and experience.

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Possible solutions

Here are some of the measures that can help alleviate the poor human capital development problem.

  • Improve the education system, particularly the institutions of higher learning.
  • Encourage creativity among the youth through funding.
  • Define structures to reward self-improvement.

5. Nature of the Nigerian market

A lack of authentic competition in the system is among the problems facing the economy. While every economy needs some form of government regulation, the problem arises when the government becomes too invested in every sector. 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 near monopoly on setting the prices of numerous products and other services. In 2016, for example, the federal government significantly increased the cost of fuel without paying attention to the negative distributive effects on the Nigerian economy.

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Possible solutions

  • Encourage state-society consultations on matters concerning the market.
  • Encourage normal market force operations instead of using federal bodies to determine prices, often for the benefit of a few individuals.

6. Crime and terrorism

Nigeria's economic problems and solutions
A crime scene marker. Photo: pexels.com, @kat wilcox
Source: UGC

These two vices negatively influence the economic situation of any country where they are present. Crime in Nigeria continues to give many people sleepless nights. In some places, people feel that they cannot walk around their neighbourhoods freely anymore.

Public security is an essential aspect of every state, and Nigeria has performed dismally in this respect. Terrorist attacks have been on the rise in Nigeria, often tied to Boko Haram activities. The situation is worsened by the regular occurrences of bombings, kidnappings, and attacks.

The Global Peace Index recently ranked Nigeria as the 16th least peaceful country in the world. As a result, numerous foreign investors are often sceptical about investing in the country.

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Possible solutions

Here are some measures to curb crime and terrorism

  • Encourage community policing. Most times, those who commit crimes and acts of terror are known in their communities.
  • Impose stricter alcohol policies. Alcohol has been linked to violence. According to the National Council on Alcoholism and Drug Dependence, alcohol is a factor in 40% of violent crimes.
  • Hotspot policing: In many cities, a very small subset of places, down to the street and block level, drive most of the crime. If these hotspots are dealt with, the crime levels will reduce significantly.

7. Unemployment

Unemployment is arguably the most detrimental problem Nigeria faces. Millions of people, mostly youths, are disappointed due to the widespread joblessness.

Unemployment is high due to numerous factors, including the ongoing economic recession, slow economic growth, corruption, and increased population. According to reports by the National Bureau of Statistics (NBS), in 2021, the country's unemployment rate was nearing a whopping 40%.

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Unemployment creates a myriad of other problems, including increased crime rates, suicides, and reduced economic growth.

Possible solutions

How can Nigeria deal with unemployment? Here are some possible solutions.

  • Increase and facilitate technical training institutions. In most countries, the demand for hands-on skills outdoes the supply. Government can encourage young people to study technical courses.
  • Deal with the monster of corruption. This will avail funds to expand the economy and create jobs.
  • Facilitate self-employment through funding and creation of markets for products and services.
  • Facilitate the export of human capital to get skilled, and educated Nigerians work opportunities abroad.

8. A poor education system

solutions to economic problems in Nigeria
An empty classroom. Photo: pexels.com, @Pixabay
Source: UGC

Numerous problems plague the Nigerian education system. Top among these are the widespread corruption, overpopulation in schools, few market-relevant courses, and general unaffordability of a good education.

Nigeria's problems in the education sector have made it hard for the system to churn out market-ready graduates. These half-baked individuals add little if any value to the economy, worsening an already dire situation.

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Possible solutions

Here are some measures to improve the quality of education.

  • Create, fund, and maintain school lunch programs. It has been proven that malnourished children learn poorly.
  • Build more schools and classrooms to deal with the perpetual overcrowding problem in Nigerian public schools.
  • Subsidize learning to make it affordable to everyone in Nigeria.

9. A poor health system

It is often said that health is the backbone of a country's economy. If a nation's citizens have no access to quality and affordable healthcare, they will not be as productive as they should be. Sadly, Nigeria's health sector leaves a lot to be desired. From inadequately funded hospitals to a less-than-impressive citizen-doctor ratio, the sector faces numerous problems.

Possible solutions

Here are some measures to improve healthcare in Nigeria.

  • Increase the funding allocated to the health sector.
  • Encourage private healthcare by including private facilities in government health funds.
  • Enhance oversight to ensure all healthcare facilities meet the laid down standards.

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10. Poor infrastructure

problems of economic development in Nigeria
A country road. Photo: pexels.com, @Pixabay
Source: UGC

A country cannot develop without a dependable power supply system, transport networks, water distribution, and numerous other infrastructural systems. Like numerous other African countries, Nigeria suffers from a chronic lack of infrastructure on which economic development can be based.

Despite being one of the largest oil-producing countries in Africa, Nigeria still has parts that are not accessible due to the lack of road or rail systems.

Possible solutions

Here are some measures to improve infrastructure in Nigeria.

  • Get sustainable funding to improve access to economic zones.
  • Get into public-private partnerships to develop infrastructure.
  • Build toll roads whose capital outlay can be recouped through the usage fees.

Which are the largest economic problems in Nigeria?

Some of the most notable include corruption, a poor education system, inadequate healthcare, and unemployment.

How can corruption in Nigeria be curbed?

Some possible solutions include providing incentives for the general population to report cases of corruption, strengthening anti-corruption bodies, and promoting transparency.

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What is Nigeria's current GDP?

The country's GDP is currently 432.3 billion.

The list of problems in Nigeria is quite extensive and includes issues such as corruption and unemployment. Like in other countries, though, the solutions to economic problems in Nigeria largely lie with its people and government.

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What causes the prevalent crime in Nigeria, and what can stakeholders do about it? Read on to find out more.

Source: Legit.ng

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