15 Problems Facing Nigeria Economy and Possible Solutions

Nigeria has been recognized as a third world country for over many years. Despite its huge economic potential it has taken a place as one of the ten poorest countries in the world. That is truly disappointing to say the least.

Nonetheless, we must agree that we have made a lot of advancement in the different economic sectors such as manufacturing, service, financial, technology, communications, and entertainment.

Yet, we can do far better with our oil wealth, a vast array of farmable lands, other available mineral resources and a bountiful lot of other economic potentials.

What are some of the challenges facing the Nigerian economy? How can we find a solution to these problems? Here are 15 problems of economic development in Nigeria and their possible solutions.

1. Poor Communication between Government and The Society

To create an enabling environment of economic growth in Nigeria would require involvement all stakeholders involved. The government would need to communicate with its citizens to be able to manage its economic, political and social affairs.

This would mean fostering understandable interaction between it, the private sector and state civil society.

Therefore, the government should include processes and mechanisms for citizens and group to articulate their interest, to mediate their differences and work together.

A good leadership will mean providing enabling environment so that the Nigerian people can get quality governance and justice. It is only in such environment can economic prosperity strive.

2. Corrupt Leaders

Truthfully corruption is in every country but in our country, Nigeria it appears it has eaten up into the every fiber of our existence. It has even been identified as a culture.

It is really appalling to say the least. As a parent would you proud enough to say that the culture you are handing over to your future generation is corruption? That was our country is doing right now.

The news is filled with corrupt politicians who want to outsmart each other in being corrupt. Daily we hear of how public officials are buying million-dollar mansions and accumulating stolen public funds in financial establishments abroad.

Take away corruption and Nigeria being an oil giant Nigeria should be recognized as one of the wealthiest nation but the case is the reverse, Nigeria is ranking as part of the top ten poorest countries in the world.

Read More: War against Corruption in Nigeria – Success so far, Challenges and Prospects

3. Changes Of Administrative Policies

The dearth of our economy has also come about due to the lack of consistency in political policies in the country and the associating greed of the leaders.

Every new administration always comes up with a new policy initiative instead of working on the one started by the previous administration. Consequently, Nigeria now has a series of inefficient and badly executed policies.

Take for instance, Charles Soludo, the chief economic adviser to Obasanjo, in this time established the national economics employment, targeted at decreasing poverty and guiding the reorientation values. However, that demands failed to reach its goal.

When the administration of late Umaru Musa Yarardua came into it discarded the policy built by Obasanjo adminstration and created a new plan to convert Nigeria into one of the top 20 biggest global economics by 2020. Now this new programme is also be dead now with the new Muhammadu Buhari regime, after gulping in so much money.

4. Underdevelopment of Human Resources

We are the result of our decisions. If we do not develop our human potential or resources we can never manage our economic resources. Hence our good or poor decisions directly affect the success or failure of our nation.

Most of the problems facing the Nigeria economy are a direct reflection of the bad quality of the human development or resource of this country.

For the country to step ahead away from its economic woes then much effort must be expended in developing our human capacity and resource.

5. Market Monopoly by Government

Another challenge facing our economy is the lack of real market competition in our country. In real terms actual capitalistic economics are guided by market forces. This self-regulating character of the market defines where one work and live, how much one earns, and what he/she is able to buy.

On the contrary there is government interference in most of our economic growth. Sure we agree that each economy needs some form of government interference but the bad thing is monopolizing it. Good market governance must work hand in hand with a healthy competition. Unfortunately, Nigeria is not one where these two exist in one dimension.

In our country the government has a valid monopoly of setting the price of products and other services and goods. In recent times, the federal government randomly increased the price of fuel without paying attention to the distributive negative effects on the Nigerian economy.

6. Increased Crime

Increasing rate of crime and terrorism has negatively affected the economic growth of the country. Investors find it hard to do business in the country due to security fears.

For a Nigerian, crime issue gives many sleepless nights. In some places, people feel can no longer walk around their own neighborhoods freely anymore.

Terrorist attack has been on the rise in the country with the growing activities of Boko Haram over the past years. Different violent activities such as bombings, kidnappings, and others remain a daily feature of the news.

As a result, the Global Peace Index of 2016, has classified Nigeria as the 4th country in the world with the highest level of deaths as a result of conflict.

Public security is an important aspect of every state, and Nigeria has failed in this respect.

Read More: 8 Ways to Prevent Crimes in Nigeria

7. High Rate of Unemployment

Unemployment seems to be on two sides of the coin in our economic issue. It is both a cause and effect of the poor economic situation. There an increased rate of joblessness due to the economic recession, and the same time the unemployment state of the country is negatively affecting the economy.

Every year, about 200,000 students graduate from different universities, but most of them are not able to find a job.  According to the official Nigerian statistics, 38% of those under 24 are unemployed, but the World Bank evaluates this number to be closer to 80%.

In March 2014, sixteen people were killed in a stampede that occurred when 500,000 desperate job-seekers were struggling to apply for about 5,000 vacancies in the Immigration Service of Nigeria.

Unemployment is undeniably one of the most damaging problems in Nigeria, as many people get disappointed due to a widespread of joblessness. It is the leading cause of crime among young Nigerian people.

Read More: The Rate of Unemployment in Nigeria and Its Effect on Socioeconomic Development

8. Poor Educational System

The educational system of this country is in shambles. The quality of education materials used in most institutions are decades old and not up to the par with modern standards.

Many of the facilities for teaching these students are either old or unavoidable absent. Hence most lectures are mostly theoretical based with little practical. At the end of the day these poorly baked graduates cannot compete or perform adequately in the job market.

Corruption and bribe is also a growing culture in the educational system. From the top management to the non-teaching staffs bribing and corruption has become the leading way to pass exams or be succeful in school.

Read More: Challenges Facing Education in Nigeria

9. Environmental and Health Issues

There is a growing concern on the health and environmental standards of Nigeria. In 2013, the Amnesty International revealed that Nigeria experiences hundreds of oil spills annually in the Niger Delta, due to sabotage, pipe erosion, and uncaring attitude by oil firms.

These oil spills tend to wilt the soil nutrients and other important elements, resulting to damage of farmlands, drinking water source and sea lives.

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 health of the citizens and a drain on the Nigerian economy.

Another problem facing Nigerian economy is the health issue. There are few good hospitals and medical experts in the country. The available ones are also dearly expensive.

10. Poor Infrastructure

The poor infrastructure of the country might seem a small matter compared to the many troubling issues like terrorism, nonetheless they are very important. We can’t actually move economically ahead without dependable power supply.

Lots of cash stashed out for poor and other infrastructural development has gone into the pocket of a few corrupt individuals in power.

In general, domestic production suffers, and a lot of foreign companies hardly choose to invest their business in Nigeria due to the constant power failures.

Other Economic Problems:

• Over dependence on oil wealth: the government has to look to other sources of economic growth.
• Poor planning: delays in making and following up plans should be a matter of urgency.
• High rate of inflation: this affects large areas of the economy and has to be reduced
• Poor management: complete overhaul has to be made to the leadership system in our country.
• High interest rate: the interest rate to be reduced to entice more investors in the country.

Read More: 7 ways to improve Nigerian economy

Conclusion

The economic difficulty facing our country is indeed huge. The problems facing the Nigeria economy are interconnected and interdependent. It will only take a dedicated nation to find solutions to these economic challenges one step at a time.

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