Download: Full Report | Executive Summary
The Nigeria Country Private Sector Diagnostic (CPSD) seeks to unlock private sector-led growth and investment in Nigeria through policy action. This report looks at four sectors where public policy actions could attract private investment: broadband/fiber-optic infrastructure; pharmaceutical manufacturing; solar energy; and cassava and soybeans. If targeted policy action is taken, the selected sectors have the potential to create significant private sector investment opportunities and job creation and are critical to addressing several overarching challenges facing Nigeria, which include: (i) lack of diversification of the economy, (ii) sharp economic and social regional disparities, (iii) growing climate vulnerability, and (iv) high youth unemployment.
Nigeria’s ICT infrastructure — specifically fiber-optic cables — offers a compelling investment opportunity, with significant potential for returns. The country’s ongoing digital transformation presents lucrative prospects in fiber-optic networks, driven by a growing demand for digital services across businesses, government, and consumers. The report concludes that this will require, among other things, improving the capacity of regulatory agencies, enforcing right-of-way fee caps, streamlining licensing for wholesale fiber providers, strengthening the regulatory authority’s oversight of dominant operators, revising infrastructure sharing rules to prevent unreasonable refusals, and launching regional pre-purchase schemes to de-risk investment in underserved areas. If the policy actions identified in the report are implemented, this could generate up to $4 billion in private investment and create up to 229,000 jobs.
Nigeria’s pharmaceutical manufacturing sector has had strong growth (7 percent annualized) and the demand for medicines is expected to increase in the coming years with universal health insurance coverage. The analysis shows that the growth and value-add to the Nigerian economy can be significant in terms of earnings, employment, and human capital development if customs and HS code classifications are aligned with international standards, NAFDAC digitizes and accelerates drug approval and testing processes, and the government prioritizes local production of essential drugs through updated procurement and pricing strategies .Adopting the policy actions included in this report could generate almost $1.6 billion in new investment and create up to 44,000 jobs.
Investing in solar energy is critical to alleviate the huge energy deficit and economic loss caused by Nigeria’s structurally unreliable grid. Private investment in solar energy could be profitable and help meet some of the increased demand. The value proposition for solar electricity is rooted in its low-cost relative to other options, making it a promising and cost-effective solution to the Nigeria’s energy transition. Realizing this potential will require effective implementation of existing customs waivers for solar equipment, raising the mini-grid permit cap to 5 MW, enabling local institutional capital through facilities like InfraCredit’s DRE fund, and undertaking reforms to improve the financial and operational performance of distribution companies. Analysis in this report estimates a potential for up to $8.5 billion in investment in solar power by 2030, creating up to 365,000 jobs.
Nigeria is the world’s top cassava producer and Africa’s second-largest soybean producer. Still, if policy constraints identified in the CPSD can be addressed, its climatic conditions and vast amounts of arable land would allow the country to produce more to meet rising global and domestic demand. Unlocking this potential will require reforming extension services to better link with research institutes and farmer associations, strengthening seed certification and licensing systems, improving the targeting and coordination of support programs using digital tools and farmer IDs, and enhancing value chain integration through digital platforms and structured farmer organization. Adopting the recommendations in this report could attract new investment of up to between $3.2 to $4 billion in cassava production and $1.6 to $2 billion in soybean production, creating up to between 275,200 to– 344,000 new jobs.
