LAGOS, Nigeria, July 24, 2014 (GLOBE NEWSWIRE) -- Nigeria is Africa's most populous country and its largest economy, yet it is little understood outside the region – and its rapid economic development has been overshadowed by global coverage of recent terrorism incidents.
A new report from the McKinsey Global Institute (MGI) (http://www.mckinsey.com/mgi) looks beyond the country's immediate challenges to its longer-term potential. The report, Nigeria's renewal: Delivering inclusive growth in Africa's largest economy, finds that with the right reforms and investments, Nigeria can become one of the world's leading economies by 2030.
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The report shows that Nigeria has the potential to expand its economy by roughly 7 percent per year through 2030, potentially raising GDP to more than $1.6 trillion. This could make Nigeria a top-20 global economy—with higher GDP than the Netherlands, Thailand, or Malaysia in 2030. Its consumer class could number 160 million people by 2030, and 70 million citizens could be lifted out of poverty.
"Nigeria has extraordinary advantages for future growth, including a large consumer market, a strategic geographic location, and a young and highly entrepreneurial population," says Reinaldo Fiorini, director and location manager of McKinsey's Nigeria office.
The findings are based on analysis of five major sectors:
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Trade. Consumption could more than triple, rising to $1.4 trillion a year in 2030, making trade the largest sector of the economy.
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Agriculture. The sector, currently the country's largest, could more than double to $263 billion by 2030.
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Infrastructure. Total infrastructure investments could reach $1.5 trillion through 2030.
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Manufacturing. If Nigeria reaches its full potential, manufacturing could have a four-fold increase in output by 2030, to $144 billion a year.
- Oil and gas. With the right reforms, the GDP contribution of the oil and gas sector could rise to $108 billion per year from $73 billion now; natural gas output could grow by 6 percent a year, adding $13 billion to GDP by 2030.
However, the report emphasizes that Nigeria will need to take concerted action on several fronts if it is to achieve its full potential for growth and translate economic progress into rising living standards and poverty reduction. These include improving delivery of government services; re-prioritizing public spending towards programs that drive development; attracting fresh investment; and capitalizing on global trends such as rising demand for resources and the spread of the digital economy.
"Nigeria could potentially triple its GDP by 2030," says Acha Leke, a director in McKinsey's Nigeria office. "This adds up to a huge opportunity for inclusive growth that should not be missed."
Distributed by APO (African Press Organization) on behalf of McKinsey & Company, Inc.
About McKinsey Global Institute
The McKinsey Global Institute (MGI) (http://www.mckinsey.com/mgi), the business and economics research arm of McKinsey & Company, was established in 1990 to develop a deeper understanding of the evolving global economy. Our goal is to provide leaders in the commercial, public, and social sectors with the facts and insights on which to base management and policy decisions.
The partners of McKinsey & Company fund MGI's research; it is not commissioned by any business, government, or other institution. For further information about MGI and to download reports, please visit http://www.mckinsey.com/mgi.
McKinsey & Company, Nigeria
Since 2002, McKinsey (http://www.mckinsey.com) has played an active part in driving the growth and accelerating development of Nigeria. McKinsey opened its office in Lagos in 2010 and today the office has completed more than 200 projects in the country, serving a range of private local companies, multinationals, state-owned enterprises, and the public sector.