Economic diversification: Experts urge FG on strengthening relevant sectors

The country’s economic structure is changing, with services, telecommunications, agriculture, trade, real estate, finance and construction accounting for a growing share of output. In this report, stakeholders urge the government to broaden and strengthen relevant sectors, thereby boosting and consolidating the diversification drive; BENJAMIN UMUTEME writes.

Nigeria’s non-oil sector contributed 96.08 per cent to the nation’s gross domestic product in the first quarter of 2026, according to the National Bureau of Statistics, with agriculture rebounding sharply to 3.15 per cent growth from a marginal 0.07 per cent a year earlier.

The solid minerals output led by metal ores and quarrying posted double-digit gains that, analysts said, had strengthened the case for consolidation, and higher-yield non-oil sectors.

The growth comes as non-oil exports hit N3.19 trillion in Q1 2026, up from N3.17 trillion in the corresponding period of 2025, according to NBS trade data, while the Nigerian Export Promotion Council reported that full-year 2025 non-oil export earnings reached a record $6.1 billion, driven substantially by agricultural commodities, processed goods and solid minerals shipped to 120 countries.

But the numbers also expose a structural gap: agriculture and solid minerals remain dominated by raw and semi-processed exports rather than value-added products, and NEXIM’s own disbursement data. ₦420 billion in financing as of September 2025 against a total lending asset base of just ₦430 billion shows a facility running close to capacity, a fraction of what operators across both sectors said they need.

That gap is now shaping the debate over whether Nigeria’s next diversification push should prioritise depth in a small set of sectors, rather than breadth across many.

Stability achieved

For much of the past two years, Nigeria’s economic conversation has centred on stabilisation, taming inflation, unifying the exchange rate, and rebuilding reserves. That phase, experts said, is largely complete. The private sector’s leading think tank, the Centre for the Promotion of Private Enterprise (CPPE), said the next test is whether that stability translates into productive capacity.

In its half-year review of the economy, CPPE Chief Executive Officer, Dr. Muda Yusuf, said macroeconomic recovery had yet to filter into the real economy in a broad-based way, even as exchange-rate stability, moderating inflation and stronger external reserves reduced the country’s macroeconomic vulnerabilities.

He argued that the quality of economic management, going forward, would be judged less by the stability of macroeconomic indicators than by the extent to which structural reforms improve productivity and reduce the cost of doing business.

Yusuf has also pressed the diversification argument from a trade-policy angle. Following the United States’ imposition of a 12.5 per cent tariff on selected Nigerian exports, he urged that the federal government should accelerate export diversification, warning that the tariff underscored the need for a more resilient and competitive export sector.

He noted that crude oil, liquefied natural gas and other petroleum products still account for more than 80 per cent of Nigeria’s exports to the United States, a concentration risk that, in his view, only deeper investment in fewer priority non-oil sectors can meaningfully correct.

Solid minerals: From raw export to value chain

Nowhere is the consolidation argument sharper than in the solid minerals. The Minister of Solid Minerals Development, Dr. Dele Alake, said the sector’s mining revenue has climbed from roughly N6 billion at the start of the current administration to N68.1 billion in 2025, a more than tenfold increase he attributed to reforms, including licence audits and a renewed local value-addition policy.

Speaking at a stakeholders’ engagement in Abuja, Alake said the value-addition drive had already attracted more than $2.6 billion in mining investment within two years, including a $600 million lithium processing facility awaiting commissioning in Nasarawa state, and a further $200 million lithium plant near Abuja.

He stressed that the federal government was no longer interested in exporting raw minerals without domestic processing and industrial value addition.

Addressing the 5th African Natural Resources and Energy Investment Summit in June, Alake widened the argument to the continental stage, telling delegates Africa must move beyond raw-material exports toward industrialisation.

He declared that: “Under the Renewed Hope Agenda of President Bola Ahmed Tinubu, Nigeria is determined to use its mineral wealth intelligently, responsibly and boldly to build national strength and contribute to continental progress.”

We’re re-building reserve via stronger non-oil exports – CBN

The Central Bank of Nigeria is backing that shift with its own instruments. At a workshop on maximising the economic benefits of minerals in February, CBN Governor, Dr. Olayemi Cardoso, disclosed that the apex bank had begun buying gold refined and aggregated locally through the Solid Minerals Development Fund under the National Gold Purchase Programme, a move designed to conserve foreign exchange and improve the quality of external reserves.

Cardoso has repeatedly tied the CBN’s reserve-building strategy to non-oil performance more broadly, noting that reserves were being rebuilt organically, not by borrowing, but through improved market functioning, stronger non-oil exports, and robust capital inflows.

Industry watchers, however, cautioned that the sector’s growth remained concentrated in a handful of large-ticket projects and gold aggregation, while artisanal and illegal mining – which the ministry had targeted through digital identity tracking and licence revocations – continues to leak value outside the formal economy.

Agriculture processing

Agriculture’s Q1 2026 rebound to 3.15 per cent growth reflects improved output, but the consolidation debate here centres on where value is captured.

NEPC data shows agricultural commodities, alongside processed and semi-processed goods, remained among the strongest drivers of Nigeria’s record $6.1 billion non-oil export performance in 2025, with the Netherlands, Brazil and India as leading destinations for cocoa and sesame shipments.

The government policy has increasingly tilted toward processing infrastructure over raw output. The newly published National Agri-Food Systems Investment Plan (2026–2035) prioritises the fast-tracking of agro-processing zones in each of Nigeria’s geopolitical zones, targeting a 40 per cent cut in post-harvest losses.

That domestic push is being reinforced by external financing: the World Bank in March approved a six-year, multi-hundred-million-dollar project under its Agriconnect initiative aimed at expanding agricultural value chains, and mobilising an additional $220 million in private agribusiness investment, with the goal of moving smallholder farming from subsistence toward commercial agribusiness.

Manufacturers, whose sector overlaps heavily with agro-processing, have echoed the same call for depth over breadth. At the MAN’s Ogun State annual general meeting, its president, Otunba Francis Meshioye, urged the government to prioritise access to finance, lower input costs, enforcement of local content requirements, and resolution of energy challenges.

It is the same bottleneck agro-processors face in converting raw cassava, cocoa and palm produce into higher-value exports rather than shipping them unprocessed.

ICT and fintech

If solid minerals and agriculture illustrate sectors still fighting to move up the value chain, ICT shows what sustained policy focus can look like. The sector contributed 9.54 per cent of nominal GDP and 11.31 per cent of real GDP in Q1 2026, according to NBS data, with telecommunications alone accounting for N4.71 trillion – 9.19 per cent of real GDP – driven by rising data consumption across MTN, Airtel and Globacom’s networks.

The Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, has framed the sector’s trajectory as the clearest evidence of what consolidation delivers.

He said the ICT sector had become the fastest-growing contributor to GDP, rising from less than 5 per cent a decade ago to 16 to 18 per cent today, with a target of 21 per cent by 2027. Fintech has been the standout within that growth.

Nigeria’s leading fintech firms – Flutterwave, OPay, Moniepoint and Interswitch among them – carried a combined valuation of about $10.6 billion as of January 2026, and industry estimates put the payments segment’s direct GDP contribution at roughly $6 billion for the year, according to data.

Prioritising sectors

At the Ministry of Finance, the consolidation argument is being made through incentive design rather than rhetoric. The Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, who assumed office on April 21, 2026, succeeding Mr. Wale Edun, has structured recent fiscal measures around named priority sectors rather than blanket relief.

Speaking on measures for manufacturers, the ministry highlighted the Import Duty Exemption Certificate, which grants zero per cent import duty on machinery and equipment used to establish or expand factories – a support the minister said was targeted rather than universal.

Investments and jobs

Addressing the 7th Africa Emerging Markets Forum hosted by the CBN in Abuja, Oyedele argued that the reform programme had moved beyond stabilisation toward ensuring reforms translate into investment and jobs.

He told delegates that, “One thing that is better than incentives is removing disincentives.” He reaffirmed the administration’s ambition of building a $1 trillion economy by 2030, a target that, by the government’s own numbers, is unreachable without agriculture, solid minerals and ICT carrying a disproportionate share of non-oil growth.

Consolidation

Data point to a consistent pattern: Nigeria’s fastest-growing non-oil sectors are not necessarily the ones receiving the deepest, most coordinated support.

ICT has scaled with comparatively light-touch regulation and strong private capital formation. Solid minerals are scaling on the back of a handful of flagship investments and a still-developing enforcement regime.

Agriculture, despite dominating non-oil export volumes, remains the least processed of the three, with financing facilities such as NEXIM’s Export Development Fund constrained by a lending asset base that leaves little room for expansion without fresh capital.

For diversification to move from data point to durable transformation, experts argue, policymakers will need to choose which sectors receive concentrated fiscal, financing and infrastructure support, rather than distributing incentives evenly across a wide non-oil basket.