5 Biggest Industries Contributing to Nigeria’s Economy

The Nigeria industry is divided into the oil and non-oil sectors, with sectors such as the oil and gas belonging to the oil sector and services belonging to the non-oil sector. According to the World Bank’s collection of development indicators in 2020, these industries recorded 12.24% employment growth, thus contributing to Nigeria’s economy.

From a report, the non-oil sector increased 4.73% in the third quarter of 2021 compared to the same quarter in 2020, boosted by 3.58% growth in agriculture and 5% growth in services. In the fourth quarter of 2021, the oil industry shrank by 8.06%, with an annual growth rate of -8.30% in 2021.

This contributed to the growth of the country. Nigeria’s real GDP growth rate in the first quarter of 2021 was 0.51%, according to the report from the National Bureau of Statistics (NBS). This was after Nigeria emerged from recession with a 0.11% GDP growth rate in the fourth quarter of 2020.

Here are the biggest industries contributing to Nigeria’s economy.

Information and Communication Technology (ICT) Industry

In the first quarter of 2021, the Information and Communications Technology (ICT) industry maintained its position as the primary sector of the Nigerian economy, with the greatest growth rate of 6.47%. Although there was a 1.18% decline in the rate compared to the same quarter of 2020, the sector grew at a pace of -14.80% in the third quarter. Also, the industry generated 14.91% of the total real GDP in the first quarter of 2021. The sector includes telecommunications and information services, publishing, motion pictures, sound recording, music production, and broadcasting.

Nigeria is Africa’s largest ICT market, with over 90 tech centres and a growing and active customer base. About 72% (over 180 million) of the population owns a cell phone in late 2021. Experts also predicted that by 2026, internet usage will have increased to 59.92%. According to Jobberman, by 2027, the industry is expected to contribute US$88 billion to the economy.

Oil and Gas Industry

The oil and gas sector is also known as the petroleum industry is one of the industries contributing to Nigeria’s economy. It is responsible for discovering and extracting hydrocarbons and refining and marketing them as petroleum products. The industry is one of Nigeria’s best and most sought-after job sectors, accounting for over 70% of the country’s total income. Nigeria is Africa’s largest oil producer with over 1.27 million barrels per day and the second-largest oil reserve country in Africa at 36.9 billion barrels.

The Energy and Power Industry

Nigeria’s power industry, which comprises electricity, gas, steam, and air conditioning, has been one of the most successful in the aftermath of the epidemic. The sector rose by 78.16% in the second quarter of 2021 from the -3% recorded in Q1 2020. This is the highest growth rate of any industry under consideration. The sector grew 56.58% YoY compared to a 2.78% decrease in the same time in 2020.

Agriculture Industry

Agriculture in Nigeria includes soil cultivation and animal husbandry. According to the World bank, it is the most significant source of employment and money in Nigeria. The agricultural industry in Nigeria primarily grows and processes cash commodities such as cocoa, peanuts, cotton, and palm oil. Cattle, sheep, goats, pigs, and fish are among others.

Despite the country’s dependence on the oil and gas industry, agriculture accounts for 25% of Nigeria’s GDP and serves as employment to over 70% of the country’s workers.

Quarrying and Mining Industries

Nigeria is endowed with natural resources such as crude oil, coal, limestone, iron ore, and tin. Some are exported, while some are used locally to produce necessities such as kerosene, jewellery, and cement. In the first quarter of 2021, mining and quarrying accounted for 9.28% of Nigeria’s gross domestic product (GDP). According to the National Bureau of Statistics (NBS), the Mining and Quarrying industry increased by –2.19% in the first quarter of 2021. Compared to the same quarter in 2020, the growth rate was lower by  –6.77%.

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