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A large majority of Nigeria’s GDP and foreign exchange is generated through the exploitation of hydrocarbon resources, namely oil and gas resources. The revenues from the sale of petroleum are the primary source of funding for the rest of the economy. Consequently the availability of large reserves of petroleum has hampered investment and diversification in other economic areas (outside of consumption).
In regards to manufacturing, most of the heavy industries are geared towards the servicing of the petrochemical industry. There has however been a recent push for economic diversification, with a resulting property and construction boom. In terms of the percentages that manufacturing and construction contribute to Nigeria’s GDP, the breakdown for 2012 according to the Nigerian Bureau of Statistics were as follows:
- Manufacturing- 4.20%
- Construction – 12.58%
As of 2015, Nigeria had the highest nominal GDP of all countries in sub-Saharan Africa, surpassing that of South Africa, a traditional powerhouse that now ranks second in GDP, in 2014. The strength of the informal sector, though, makes estimates of GDP somewhat uncertain. Nigeria is now considered a middle income country.
Agriculture remains Nigeria's largest economic sector, accounting for approximately 27 percent of its GDP. Despite this, low agricultural productivity means that Nigeria is a net importer of food. Oil production contributes significantly to Nigeria's revenue, and the country's reliance on commodities is increasingly worrisome given the recent fall in commodity prices.
Manufacturing accounts for only slightly over 4 percent of Nigeria's economy while construction accounts for 3 percent. In both cases, these numbers are worryingly low for an emerging market, reflecting insufficient investment in infrastructure and over-reliance on extractive industries. For most emerging markets, a strong manufacturing sector has been crucial in the transition to a fully developed economy. On a positive note, though, telecommunications has leapfrogged heavy industry as part of the Nigerian GDP, suggesting that Nigerian innovations in such areas as mobile banking might enable it to grow GDP by transitioning to service and technology sectors.
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