The World Bank’s Country Director for Nigeria, Dr. Ndiame Diop, has confirmed that Nigeria remains the largest economy in Africa by Gross Domestic Product (GDP) despite the challenges faced by its private sector.

Speaking at the Country Private Sector Diagnostic (CPSD) and Stakeholder Engagement in Abuja yesterday, Dr. Diop said while Nigeria receives far less Foreign Direct Investment (FDI) than its potential warrants—especially in comparison to countries like Indonesia and South Africa—it continues to hold its position as Africa’s biggest economy.

He stated that the CPSD report, set to be released in the coming weeks, will reveal the impact of private sector constraints on economic growth.

He noted that if targeted actions were taken to remove these obstacles, Nigeria’s economic potential would be significantly enhanced.

The current macroeconomic reforms, he explained, have created a favorable environment for such changes. He cited the country’s recent economic stabilization measures, particularly exchange rate market adjustments and improved access to foreign exchange, as critical steps that have already enhanced investment conditions.

Dr. Diop outlined four key sectors where strategic reforms could unlock massive investment and job creation. In the Information Communication Technology (ICT) sector, investment opportunities worth up to $4 billion could be realized, potentially creating more than 200,000 jobs.

In agribusiness, reforms could unlock $6 billion in investment and generate over 275,000 jobs.

The solar photovoltaic (PV) industry holds the potential for $8.5 billion in investment and more than 129,000 jobs, while the pharmaceutical sector could attract $1.6 billion and create more than 30,000 to 40,000 jobs.

For the ICT sector, he identified the high, unpredictable, and inconsistent right-of-way fees, levies, and informal charges—comprising 30 to 70 per cent of broadband rollout costs—as a major barrier. Addressing these regulatory inconsistencies, he argued, would be a game-changer for broadband expansion. He acknowledged that the National Economic Council has recognized this issue and that progress is being made through a World Bank-supported initiative.

Additionally, he pointed to challenges such as vandalism, limited financing for rural broadband expansion, and the need for competitive access to wholesale fiber. He noted that efforts are underway in collaboration with government agencies to resolve these issues, and the World Bank, the International Finance Corporation (IFC), and private investors are prepared to support broadband infrastructure development.

On solar power, Dr. Diop described Nigeria’s energy sector as difficult but noted that renewable energy access, particularly solar PV, has been a bright spot. He explained that private sector investment in renewable energy has historically been hindered by high costs and unviable tariffs. However, blended finance mechanisms supported by the World Bank and IFC have helped bridge this gap, making off-grid solutions more viable.

He pointed to the DES project, which aims to connect 17.5 million households and businesses to solar power, as evidence of growing private sector interest. While the solar industry is expanding, he stressed that reforms to improve Nigeria’s grid electricity supply remain crucial for industrialization.

The Regional Director for Central Africa and Anglophone West Africa at the IFC, Dr. Dahlia Khalifa, stressed the importance of consistency in regulatory policies, particularly in customs duties and revenue agency fees. She noted that unpredictability discourages private sector investment, as businesses rely on stable regulatory environments for strategic planning.

Khalifa also pointed out that while direct job creation in the pharmaceutical sector may be lower compared to other industries, improved healthcare services would yield far-reaching economic benefits.

Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, commended the IFC for its support across critical sectors, including agriculture, infrastructure, and pharmaceuticals. He highlighted key financing partnerships such as the $1.2 billion facility for Indorama’s fertilizer expansion in Eleme, investments in cocoa processing, and a $70 million SME financing initiative with First City Monument Bank.

He also acknowledged IFC’s latest commitment of $70 million to five Nigerian companies under the Distributive Access to Renewable Energy programme, part of the federal government’s broader Mission 300 initiative.

Edun said President Bola Tinubu’s administration has undertaken bold and necessary reforms that have reshaped Nigeria’s economic landscape. He noted that the removal of wasteful subsidies has strengthened government finances, while improved security has boosted oil production and revenue.

He highlighted that private sector confidence is growing, with new investments beginning to materialize in response to the government’s policy changes.

The minister restated the administration’s commitment to addressing the cost-of-living crisis, particularly through increased food production and affordability measures. He acknowledged that reforms such as the removal of fuel subsidies and the adoption of market-based pricing mechanisms have led to short-term inflationary pressures.

However, he assured that targeted interventions, including direct cash transfers to vulnerable citizens with World Bank support, will help mitigate the impact.

He insisted that the government remains determined to leverage technology to ensure swift, biometric-enabled assistance to those in need.