NIGERIA'S ECONOMIC STRUCTURE
Nigeria’s economic structure is mainly based on oil. The economy has been unstable for years due to poor economic system, corruption, political unrest and poor fiscal policies. However, since the introduction of democracy and the restoration of economic reforms, the country is growing at a fast geometrical ratio. According to the International Monetary Fund (IMF) projections, Nigeria is the second fastest growing economy in the world and will outperform other African economies in the near future.
NIGERIA ECONOMIC STRUCTURE: GDP COMPOSITION
Agriculture was essential to Nigeria’s economic structure till the early 1990s. It was one of the large sources of foreign currency. However, over the years, the agricultural sector has become a no go area for the Nigerian economy. According to the 2009 estimates, the agricultural sector provides job opportunties to more than 70% of the working population but contributes only 33.4% of the total national production. The nation has not been able to satisfy internal demand and has to import a huge amount of food products.
The Nigerian industrial sector primarily based on oil extraction and refining. It employs approximately 10% of the labor force and accounts for 34% of the GDP. The service sector is also gradually paving way in the country. Almost 20% of the population is employed in service sector jobs. This sector contributes 32.5% of the total GDP.
Nigeria Economic Structure: Business Climate
Nigeria’s economic structure has been suffering from a lack of infrastructure and poor regulation that is related to foreign and private investments. To encourage foreign direct investment in the industrial sector [oil and natural gas sector], the country has come terms and aligned trade tariffs with the Economic Community of West African States (ECOWAS) standards. Looking to 2005, trade tariffs were the second largest source of creating revenue for the country.
In the non-oil economy, there are several untouched segments, such as the communication and service sectors. However, to enjoy long term benefits, foreign investors shoulld educate themselves about the local culture, traditions and trade laws.
