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The World Bank has urged the Federal Government to address key constraints hindering private sector growth in Nigeria, stating that reforms in critical sectors could unlock billions of dollars in investments and create thousands of jobs.

Speaking at the Country Private Sector Diagnostic and Stakeholder Engagement in Abuja on Thursday, the World Bank’s Country Director for Nigeria, Dr Ndiame Diop, reaffirmed that Nigeria remains the largest economy in Africa despite the challenges facing its private sector.

He, however, noted that the country receives minimal foreign direct investment compared to its potential and lags behind countries like Indonesia and South Africa.

“That’s true despite all the challenges that the private sector faces in Nigeria. And that’s true despite the fact that Nigeria receives very little FDI compared to its potential and compared to a country like Indonesia and South Africa,” Diop said.

While noting that the final CPSD report would be released in a few weeks, he stressed that removing obstacles to private sector participation could significantly boost economic growth.

“Now just imagine if some actions were taken to remove challenges, and obstacles that the private sector is facing in many areas. Just imagine where the economy will go. Now, this is the right time to really address these constraints that the private sector is facing,” he stated.

Diop said that the timing was right due to the bold economic reforms implemented over the last two years to stabilise the economy.

“With macro stability, with this exchange rate market and access to FX being much, much more available than before, and in general, the investment environment has already improved quite significantly from a macroeconomic perspective.

“Now, this is the time to leverage that improved macroeconomic environment by doing sector reforms that will unlock investment and create jobs,” he added.

According to him, targeted reforms in four key sectors—ICT, agribusiness, solar energy, and pharmaceuticals—could unlock over $20bn in investments and create more than 600,000 jobs.

“There are many other sectors where Nigeria can actually invest more, create more jobs, and create more prosperity. But let’s look at these four. If you take the right actions and remove constraints in these sectors, you will unlock massive investments,” he said.

He further highlighted specific investment projections, stating, “For example, in the ICT sector, investment up to $4bn could be unlocked and more than 200,000 jobs can be created. This is because Nigeria has set an ambitious target for the broadband rollout. And if you get to that target, that will unlock investment, but that will not happen automatically. It will require reforms.”

Similarly, he noted that agribusiness reforms could unlock $6bn, creating 275,000 jobs, while investments in solar power could reach $8.5bn, generating 129,000 jobs. The pharmaceutical industry could attract $1.6bn and create more than 30,000 jobs.

Highlighting the constraints in the ICT sector, Diop identified high, unpredictable, and inconsistent right-of-way fees, levies, and informal charges, which account for between 30 and 70 per cent of broadband rollout costs across states. He stated that addressing this issue would significantly boost investment in ICT infrastructure, allowing Nigeria to meet its broadband expansion targets.

“However, the high, unpredictable, and inconsistent right-of-way fees, levies, and informal charges… represent between 30 and 70 per cent of the cost when you roll out broadband across states. So addressing this in itself would definitely change the game in terms of unlocking investment and advancing the rollout objective of the government,” he explained.

He acknowledged that some progress had been made in resolving this challenge, noting ongoing discussions with state governments, supported by the World Bank’s Saver programme.

He also pointed out the need to improve access to wholesale fibre networks, tackle issues such as vandalism and theft, and address the limited availability of financing for rural broadband expansion.

Diop further revealed that the World Bank, alongside the International Finance Corporation and other development partners, was working on an ambitious project to co-finance the expansion of fibre-optic networks across Nigeria.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, expressed the Federal Government’s appreciation for the IFC’s support in key sectors such as agriculture, infrastructure, and pharmaceuticals. He highlighted past collaborations, including the $1.2bn financing for Indorama’s fertiliser production expansion and the $70m SME financing through First City Monument Bank.

“The Federal Government deeply appreciates the IFC support in key sectors we heard about today, about agriculture, about infrastructure and pharmaceuticals, for example, but they have been key in sectors such as fertiliser processing, SME financing, rural electrification, and the kind of projects that they have helped us finance with private sector leadership,” Edun said.


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