The Africa Development Bank (AfDB) has projected that Nigeria needs the sum of $285.6bn to accelerate sectoral transformation by 2030.
The lead economist , Nigeria Country Department, AfDB, Jacob Oduor, disclosed this at the launch of the ‘Nigeria Country Focus Report.’
He said the slow pace of structural transformation has not been sufficient for industrial takeoff.
This, he said, has led to the relocation of labour from agriculture to other sectors, particularly services.
He added that for the country to upscale structural development, it will need “$47.6bn annually”.
According to the report, “More than half of Nigeria’s workforce (56 percent) are employed in three sectors that are less productive than the economy-wide productivity (agriculture, transport, and public service).
“Manufacturing and wholesale and retail trade, both of which are only 20 percent more productive than the economy-wide productivity, the total workforce employed in the five sectors is 80 percent”.
The reports highlighted scope for aggregate productivity gains by reallocating labor to the high productivity sectors, even though not all the high-productivity sectors are labor intensive.
“Modest movements out of the lowest-productivity sectors may generate some growth. The low relative productivity of the manufacturing sector, which constraints the pace of industrial development and the pace of structural transformation is of much concern.
“The manufacturing sector in Nigeria, like in many parts of Africa is characterized by a growing number of small and informal firms that experience employment growth but little or negative productivity growth.
“The service sector is the most productive in Nigeria, all the service sub-sectors except the public service, are more productive relative to the economy wide productivity.
“The real estate is 74 times more productive relative to the economy-wide productivity level and Nigeria will need $47.6 billion annually until 2030 to accelerate its structural transformation process.
“The bulk of these needed resources are in supporting SDG9 on industry, innovation and infrastructure $19.6 bn in 2030 and $3.4bn in 2063,” It added.
The Director General Nigeria Country Department, AfDB, Lamin Barrow warned that limited access to affordable financing is a major constraint to fast-track Nigeria’s structural transformation
He said, “The report estimates that Nigeria needs significant financing to accelerate its structural transformation. The annual financing gap to fast-track this structural transformation is estimated at $31.5bn to achieve the SDGs and $5.5bn to achieve the Agenda 2063 targets.
“Closing this financing gap will require innovative policy responses including accelerated domestic revenue mobilization in the context of the ongoing fiscal consultation program as well as proper valuation of the Nigeria’s critical and rare earth minerals.
“These, if well-valued, managed and managed, will have the potential to generate additional resources and for that matter substantial additional resources to underpin structural transformation.”
ENDS