‘$1tr economy target threatened without translating reforms to productivity’

By : Adaku Onyenucheya

Date: 9 December 2025 5:02am WAT

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Containers at Apapa port

Containers at Apapa port

The Federal Government’s $1 trillion economy ambition faces a serious threat unless recent reforms are translated into real productivity and industrial growth drivers, as well as efficient ports, the latest Bashir Adeniyi Centre for International Trade and Investment (BACITI) Economic Insight said.

The report said that while the Federal Government’s broad macroeconomic reforms, including exchange rate unification, fuel subsidy removal and renewed trade facilitation efforts, have only stabilised fiscal conditions, they have failed to unlock the level of productivity needed to drive large-scale industrialisation needed to meet the 2030 ambition.

The report reviewed highlights from the Nigerian Institute of International Affairs (NIIA) Trade and Investment Forum, where financial experts, academics and practitioners offered strategic guidance for Nigeria’s journey toward a $1 trillion economy.

According to experts, the reforms have improved government revenues, while manufacturing output, exports and industrial growth remain weak, signalling limited structural transformation and imbalance.

The BACITI report stated that despite recording a real gross domestic product (GDP) growth rate of 3.4 per cent in 2024, higher than the 2.1 per cent population growth, the economy has yet to unlock productivity growth.

The report noted that the economy was weighed down by an average inflation rate of 26 per cent, significantly eroding household welfare.

The BACITI report cited scholars like Dani Rodrik (2004) and Justin Lin (2012), who emphasised how true structural transformation requires more than macro-stability, depending partly on productive investment, technology absorption and institutional coherence.

On trade facilitation, the report acknowledged the rollout of the Nigeria Customs Service’s (NCS) B’odogwu, a homegrown digital clearance platform, noting that although the system has improved transparency and revenue efficiency, significant logistics bottlenecks persist.

BACITI cited the World Bank report, which estimates that clearing goods at Nigerian ports still takes an average of 19 days, compared with seven days in Ghana and five days in Morocco.

According to the report, port congestion, fragmented inter-agency coordination and inadequate infrastructure continue to undermine digitisation gains, citing that while commendable progress has been made, more systemic reforms are needed to align trade facilitation with Nigeria’s trillion-dollar goal.

The report noted that Nigeria’s GDP fell sharply from $668 billion in 2019 to $252 billion in 2024 before recovering slightly to $285 billion in 2025, placing the country among Africa’s top six economies alongside Egypt, South Africa, Algeria, Morocco and Ethiopia.

However, the contraction was largely attributed to naira depreciation, subsidy removal, exchange rate adjustments and inflation following fiscal reforms, with analysts at the forum describing the decline as a painful but necessary structural correction designed to strengthen long-term resilience.

The report noted that structural weaknesses continue to undermine the reform agenda, citing multiple taxation, unreliable electricity supply of about 5,000 megawatts for a population of over 230 million and frequent policy reversals as major constraints facing the private sector.

“The missing link is policy coherence, the alignment of fiscal, monetary, and trade policies. Customs reform is meaningless without efficient transport. Exchange rate unification achieves little without export capacity. Prof. Olawale estimates that achieving a $1 trillion economy will require sustained annual growth of 15-19 per cent, attainable only through industrial deepening and value-chain integration,” the report stated.

The current export data presented showed that Nigeria remains structurally fragile and heavily dependent on primary commodities, with crude oil accounting for 52.9 per cent of total exports, liquefied natural gas 9.4 per cent, raw materials 5.1 per cent, manufactured goods 1.4 per cent and agricultural products 8.3 per cent.

The report warned that without rapid diversification into high-value manufacturing and services, the country’s trillion-dollar target would remain out of reach.

The BACITI report further highlighted that foreign direct investment also remains weak, with inflows declining from $3.31 billion in 2021 to $1.08 billion in 2024, according to UNCTAD.

According to the BACITI report, in contrast, South Africa and Egypt attracted $5.23 billion and $9.84 billion, respectively, over the same period, out of Africa’s total inflows of $52.63 billion.

At the forum, experts disclosed that more than 80 per cent of impact investments in Nigeria are funded by foreign development finance institutions, while domestic investors account for less than five per cent, reflecting what is described as a growing confidence deficit.

The report also highlighted sub-national competitiveness, noting that investors interact with locations, not just national governments, noting that Lagos’s policy consistency, PPP-driven infrastructure, and trade-friendly institutions offer a blueprint for other states.

BACITI also noted that these are increasingly central to economic growth, identifying Lagos, Ogun, Rivers and Kano states now functioning as semi-autonomous economic hubs, with Lagos alone contributing nearly 30 per cent of Nigeria’s GDP and over 70 per cent of non-oil exports.

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