Nigeria’s economic growth is failing to translate into a corresponding improvement in living standards, income, productivity and economic influence, economist Bismarck Rewane has said, warning that the country risks remaining a fast growing but underdeveloped economy unless it converts its major resources and emerging opportunities into broader economic gains.
Rewane made the assessment in a presentation titled Awakening The Sleeping Giant: Nigeria in the African Context, delivered at the Lagos Business School Breakfast Session on September 2, 2026.
The presentation examines Nigeria’s changing position within Africa, its economic strengths and structural weaknesses, the sectors capable of driving stronger growth, developments in energy and financial markets, and the outlook for the economy.
According to Rewane’s presentation, Nigeria still possesses many of the characteristics of a major economic power, including a large population, abundant natural resources, a substantial domestic market, a strong financial sector, an expanding technology ecosystem and considerable cultural influence.
However, these advantages have not translated into a comparable improvement in economic welfare or Nigeria’s influence within Africa.
The presentation describes the situation as a paradox, noting that Nigeria can experience relatively strong economic growth while remaining constrained by poverty, low productivity, weak infrastructure, energy shortages, insecurity and limited income per head.
Nigeria’s share of Africa’s economy has fallen sharply
Rewane’s presentation shows that Nigeria’s economic weight within sub Saharan Africa has declined significantly over the past decade.
Nigeria’s share of sub Saharan African GDP fell to 13 per cent in 2025 from 31 per cent in 2014, according to the presentation.
Its share of West Africa’s GDP has also declined. Nigeria accounted for 58.4 per cent of West Africa’s GDP in 2000 and 65 per cent in 2014, but the figure fell to 36.7 per cent in 2024 before recovering to 42 per cent in 2025.
The presentation also places Nigeria behind South Africa and Egypt among Africa’s largest economies, marking a significant reversal from the period when Nigeria occupied the continent’s top position.
Rewane links the deterioration to weakening purchasing power and what the presentation describes as crony capitalism, alongside broader structural weaknesses that have limited the country’s ability to convert economic resources into sustained productivity.
The presentation notes that Nigeria’s real GDP growth averaged about 7 per cent between 2000 and 2014, placing the country among Africa’s stronger performers during that period.
The subsequent slowdown has coincided with a rapidly growing population. Nigeria’s population increased from about 149 million in 2006 to approximately 237 million in 2025, representing a 59.06 per cent increase.
The presentation argues that food production has increased, but the pace of population growth has created additional pressure on the country’s ability to provide sufficient food and improve living standards.
Economic growth is not translating into better living standards
The central argument of Rewane’s presentation is that headline economic growth should not be confused with economic development.
Nigeria recorded real GDP growth of 4.43 per cent, but the presentation places this alongside much weaker indicators of household welfare, including low income per head, low energy consumption, poverty and a life expectancy of about 54.9 years.
The presentation projects Nigeria’s income per head at $1,557.18 in 2026, describing the country’s income level as among the lowest when compared with other major African economies and among the lowest globally.
It also places Nigeria’s energy consumption at about 0.26 kilotonnes of oil equivalent per person in 2026, compared with 1.50 in South Africa and 0.86 in Egypt.
Life expectancy is projected at about 54 years in 2026, with the presentation attributing the low level largely to high early childhood mortality, inadequate healthcare infrastructure and widespread poverty.
These figures form the basis for one of the presentation’s strongest conclusions: “A country can be fast growing but underdeveloped.”
Poverty and insecurity remain major threats to the growth story
Rewane’s presentation argues that improvements in some macroeconomic indicators have yet to translate into meaningful improvements in household welfare or security for most Nigerians.
It cites a poverty rate of 63 per cent in 2025, representing about 140 million people below the national poverty line. The presentation projects poverty at about 62 per cent in 2026, equivalent to roughly 141 million people.
The poverty rate, according to the presentation, increased from 56 per cent in 2023 to 61 per cent in 2024 and 63 per cent in 2025.
Security pressures have compounded the problem.
The presentation cites about 750 terrorism related deaths and 171 attacks in 2025, while placing Nigeria fourth globally in the 2026 Global Terrorism Index. It identifies ISWAP and Boko Haram as responsible for about 80 per cent of terrorism deaths.
Kidnapping has also worsened. According to the presentation, 7,825 people were abducted between July 2025 and June 2026, representing a 66 per cent increase, while about ₦7.78 billion was paid in ransom.
The presentation says Boko Haram captured more than 90 per cent of ransom proceeds during the period.
It also places Nigeria eighth globally in organised crime in 2025, compared with 16th in 2020, indicating a deterioration in the country’s crime ranking over the five year period.
Nigeria still has the foundations of a major economic power
Despite the challenges, Rewane’s assessment is not that Nigeria lacks economic potential.
The presentation identifies the country’s large population, natural resources, domestic market, financial sector, technology ecosystem, entrepreneurial capacity and cultural influence as major strengths.
It also identifies refining potential as an increasingly important advantage.
The challenge, according to the presentation, is the country’s inability to create sufficiently strong connections between these assets and the wider economy.
High cost of capital, underemployment, infrastructure gaps, low productivity, power constraints, insecurity and fiscal pressures continue to limit the ability of businesses and households to benefit from these strengths.
This is why the presentation places considerable emphasis on sectors with strong linkages to other parts of the economy.
Refining could change Nigeria’s position in Africa
The Dangote Refinery occupies a significant position in Rewane’s assessment of Nigeria’s economic opportunities.
The presentation argues that Nigeria’s dependence on imported refined petroleum products previously resulted in an annual fuel import bill of between $20 billion and $25 billion between 2002 and 2022, while creating opportunities for rent seeking and leaving domestic refining capacity underutilised.
The emergence of large scale domestic refining could alter that structure.
According to the presentation, the Dangote Refinery is already producing at a scale capable of reducing Nigeria’s dependence on imported refined products, with production reaching about 75 million litres per day.
The change is potentially larger than simply replacing imported petrol and other petroleum products.
Rewane’s presentation argues that Nigeria could move from being an importer of refined petroleum products in Africa to becoming a supplier to the continent and international markets.
The refinery is already exporting aviation fuel, including to international destinations, while West African regulators are exploring the possibility of a regional fuel pricing benchmark and trading hub as refining capacity expands.
The presentation therefore sees Nigeria developing into an energy hub, refining hub, aviation fuel supplier, petrochemical hub and regional trading centre.
The refinery’s bigger opportunity lies in its economic linkages
Rewane’s presentation argues that the Dangote Refinery should not be considered in isolation because its most important economic effect could come from the businesses that develop around it.
The refinery could support petrochemicals, manufacturing, logistics, ports, financial services, technology and other businesses while creating jobs and increasing exports.
The presentation describes these connections as the real multiplier effect.
Its broader sector analysis identifies manufacturing, telecommunications, crop and animal production, trade, land transport and oil refining among sectors with strong backward and forward linkages.
These sectors can both demand inputs from other parts of the economy and supply products and services to other businesses.
The implication is that Nigeria’s growth strategy should focus not only on sectors that expand output, but on sectors capable of transmitting that growth throughout the economy.
Power remains critical to Nigeria’s industrial ambitions
Electricity is another major part of the presentation’s economic outlook.
Rewane’s presentation points to a push towards higher electricity generation and transmission capacity, including a government target of 8,000 megawatts of reliable electricity wheeling by the end of 2027, compared with about 5,000 megawatts currently.
The Transmission Company of Nigeria has secured more than $1.4 billion in loans and grants to expand the transmission network, with the funding supporting the commissioning of 89 transformers.
The presentation also highlights Aliko Dangote’s proposed 20,000 megawatt power project as part of the emerging push to increase electricity supply.
At the same time, the government is attempting to address longstanding liquidity problems in the electricity market. The presentation says the Federal Government paid ₦333 billion to generating companies and is planning another ₦729 billion issuance to clear outstanding obligations.
Renewable energy is also becoming a larger component of the country’s energy mix.
According to the presentation, solar is now contributing more than 10 per cent of the energy mix, with Nigeria adding about 803 megawatts of solar photovoltaic capacity in 2025 and reaching roughly 1.2 gigawatts of cumulative capacity.
Stronger power supply could unlock wider economic activity
The presentation links improvements in electricity supply to industrialisation, agricultural value addition and the expansion of the digital economy.
Manufacturing, mining and quarrying, cement and construction materials, agriculture, telecommunications, retail, financial services, transportation, hospitality and healthcare are among the sectors identified as potential beneficiaries.
This reflects Rewane’s broader argument that Nigeria needs growth with stronger connections across the economy.
A stronger power system could reduce operating costs for businesses, support production, improve agricultural processing and strengthen digital and service based businesses.
Inflation could remain a constraint despite stronger growth
The presentation expects inflation to remain elevated in the near term, with food prices continuing to place pressure on the headline rate.
It projects headline inflation around 16 per cent to 17 per cent in the short term and identifies food prices and supply side pressures as major drivers.
Insecurity, infrastructure deficiencies and import dependence are also identified as structural factors that continue to feed inflation.
The presentation therefore expects inflation to remain a major constraint through 2026 even as the economy maintains positive growth.
CBN faces a difficult decision on interest rates
The inflation outlook leaves the Central Bank of Nigeria facing a difficult monetary policy decision.
Rewane’s presentation places the probability of the Monetary Policy Committee holding rates at 60 per cent, with a 40 per cent probability of a cut and no expectation of a rate increase.
A potential cut, according to the presentation, would likely be modest, at about 25 to 50 basis points.
The presentation argues that the CBN is caught between rising money supply, political spending and renewed food price pressures.
A further increase in petrol prices could also reignite inflation, making an aggressive easing cycle difficult.
The presentation therefore suggests that the CBN is likely to wait for clearer evidence that food inflation is temporary before reducing rates substantially.
Nigeria’s high real interest rate could attract foreign investors
Despite the inflation challenge, Nigeria’s high interest rate environment is creating an important attraction for foreign portfolio investors.
The presentation places inflation at 15.43 per cent and the interest rate at 26.5 per cent, producing a real interest rate of about 11.07 per cent.
According to the presentation, this gives Nigeria one of the most attractive real yields available to international investors and could support renewed foreign portfolio inflows.
Gross foreign exchange reserves stood at $53.31 billion on August 27, while the presentation expects reserve accumulation to remain supported by oil revenue and portfolio inflows.
Foreign investors are also being attracted by exchange rate stability, high interest rates and what the presentation describes as improving policy credibility.
The naira has moved from overvaluation towards undervaluation
The presentation’s assessment of the naira has also changed significantly from the period of severe exchange rate distortions.
According to the presentation, the naira was substantially overvalued around 2022, with an estimated peak overvaluation of 22.7 per cent based on IMF data.
The currency subsequently underwent a major correction in 2023 and has since stabilised.
Rewane’s presentation now describes the naira as technically undervalued by 12.70 per cent.
However, it identifies several structural factors that continue to weigh on the currency, including limited export diversification, persistent demand for dollars, a high country risk premium and foreign exchange liquidity constraints.
Nigeria’s stock market boom faces a busy September
Nigeria’s capital market has also recorded significant gains.
The presentation says the Nigerian Exchange was the world’s best performing stock market in dollar terms in July 2026, recording a year to date return of about 65 per cent according to Bloomberg.
NGX market capitalisation stood at about ₦157.7 trillion, equivalent to 35.56 per cent of GDP.
However, Rewane’s presentation cautions that market capitalisation does not automatically translate into higher productivity in the wider economy.
September is expected to bring several events capable of reshaping investor behaviour, including the US Federal Reserve meeting, the Monetary Policy Committee meeting, the Dangote Refinery initial public offering, the review of the Central Bank’s open market operations policy and FTSE Russell’s reclassification of Nigeria to Frontier Market status.
Dangote Refinery IPO could reshape the capital market
The Dangote Refinery IPO is presented as one of the most important near term developments for the Nigerian market.
According to the presentation, the IPO could increase NGX market capitalisation from about ₦158 trillion to approximately ₦210 trillion, taking the market to about 46 per cent of GDP.
The transaction could also broaden the investor base through pension fund participation and potential cross listing.
In the short term, however, Rewane’s presentation expects investors to rotate out of some existing holdings to finance subscriptions to the IPO, potentially putting pressure on the broader market.
The presentation nevertheless expects the offer to attract strong demand and potentially become oversubscribed.
Nigeria’s creative economy is emerging as a source of foreign exchange
The presentation identifies the creative economy as another area where Nigeria’s international influence is expanding.
Nollywood’s annual film output increased from about 1,000 to 1,500 films in 2016 to about 2,500 in 2026, according to the presentation.
Cinema screens also increased from 134 to 369 over the period, although cinema attendance was lower at 2.79 million in 2026 compared with 3.23 million in 2016.
Nigeria’s music industry has similarly expanded its international presence.
The number of Nigerian Grammy nominees increased from one in 2019 to five in 2026, while Nigerian artists recorded six O2 Arena sellouts in 2025 and 2026 compared with two in 2019.
Rewane’s presentation estimates that the creative economy contributes about 2.3 per cent of GDP and supports more than 4.2 million jobs.
It also identifies streaming, licensing, tours, concerts, digital distribution, social media, telecommunications, financial services and digital payments as channels through which Nigeria’s creative output can generate foreign exchange.
The presentation describes these earnings as part of Nigeria’s invisible inflows and argues that services and talent exports can help bridge the country’s revenue gap.
Nigeria’s trade with Africa remains heavily dependent on commodities
Despite the potential for broader African economic influence, Nigeria’s export structure remains concentrated.
The presentation says crude oil accounts for 71 per cent of total exports, while gas contributes 12 per cent and other products account for 17 per cent.
It also identifies fertilizer and cocoa as increasingly important export products.
Nigeria’s leading African export markets include Togo, South Africa, Ivory Coast, Egypt and Senegal, while its West African exports are concentrated in Togo, Ivory Coast, Senegal, Ghana and Benin.
The presentation argues that diversification remains critical if Nigeria is to convert its large market and production capacity into greater influence across Africa.
September brings a fresh test for Nigeria’s economy
Rewane’s September outlook points to a combination of monetary, fiscal, political and external pressures.
The presentation expects government spending to increase sharply as the country moves towards the 2027 elections, while higher political spending could increase naira liquidity.
It also expects oil production to rise towards about 1.65 million barrels per day and anticipates increased Dangote Refinery production as the refinery receives more crude from the Nigerian National Petroleum Company.
The presentation puts the Dangote Refinery IPO on September 14 among the major events for the month.
It also expects August year on year inflation at about 16.15 per cent and places a 60 per cent probability on the MPC holding rates, particularly if the US Federal Reserve adopts a hawkish position.
The presentation projects the naira at about ₦1,390 to ₦1,430 per dollar in the parallel market, with the official rate around ₦1,300, while warning that a widening gap between official and parallel rates could concern investors.
Nigeria’s sleeping giant still has to turn potential into productivity
Rewane’s presentation ultimately presents Nigeria as an economy with significant resources and opportunities but a persistent failure to translate those advantages into broad based prosperity.
The country has a large population, a major domestic market, natural resources, a growing technology ecosystem, an increasingly influential creative economy and emerging opportunities in refining, power and financial markets.
But poverty, insecurity, low income, weak productivity, infrastructure deficiencies and energy constraints continue to prevent those advantages from producing the level of economic welfare expected of a country of Nigeria’s size.
The presentation’s central challenge is therefore not whether Nigeria possesses the resources to become a major economic force.
It is whether the country can build the infrastructure, security, productivity and economic linkages required to turn those resources into sustained improvements in incomes and living standards.
For Rewane, that is what it means to awaken the sleeping giant.
