Nigeria's persistent poverty despite abundant resources stems from weak production capacity, according to an analysis by economist Banji Oyelaran-Oyeyinka. He argues that overreliance on neoliberal policies has failed to foster inclusive growth, emphasizing the need for industrial strategies. Rural areas bear the brunt, with 72 percent of residents multidimensionally poor.
A central puzzle baffling many Nigerians is how a resource-rich nation remains trapped in pervasive poverty, writes Banji Oyelaran-Oyeyinka, Senior Special Adviser to the President on Industrialisation at the African Development Bank Group. Data shows 63 percent of the population, about 133 million people, are multidimensionally poor, with rural areas at 72 percent compared to 42 percent in urban zones.
The core issue lies in Nigeria's weak production systems, exacerbated by insecurity, climate change, and overreliance on primary exports like crude oil, cocoa, and cashew. Despite 84 million hectares of arable land and 230 billion cubic meters of water, the country spends $10 billion annually on food imports, including $3 billion on cereals. Oyelaran-Oyeyinka criticizes neoliberal prescriptions prioritizing macroeconomic stability over manufacturing, which has led to financialisation, premature trade liberalisation, and deindustrialisation.
He highlights the cashew sector: West Africa produces half the world's cashew but processes only five percent, with 80 percent of processing in India and Vietnam. The global market grows at 4.5 percent annually, projected to reach $11 billion by 2030. Vietnam's processed agricultural exports hit $62.5 billion in 2024, with cashew at $4 billion, while Nigeria's total agricultural exports were about $3 billion.
To address this, Nigeria needs context-specific industrial strategies, investment in processing, technology, and infrastructure. The African Continental Free Trade Area (AfCFTA) offers opportunities for regional value chains, especially amid protectionist tariffs like the United States' 46 percent on Vietnamese cashews. Initiatives like Special Agro-Industrial Processing Zones (SAPZ), such as in Ogbomosho, could cluster farms and firms, mirroring China's 2,500 special economic zones that eradicated extreme poverty in 2021.
Oyelaran-Oyeyinka stresses rural transformation through education, credit, cooperatives, and infrastructure to shift from consumption to production, breaking the 'poverty equilibrium' for mass employment and shared prosperity.