Nigeria’s Economic Renaissance

The largest economy in Africa, Nigeria, is undergoing a dramatic economic shift. The nation, which has historically depended on oil, is expanding into other markets, especially those for tourism, gambling, and Nollywood—the film industry. These industries are changing Nigeria’s economic landscape because they are not just cultural phenomena but also significant economic contributors.

The Economic Turnaround

Nigeria’s GDP growth has recently shown signs of recovery, with the non-oil sector contributing over 90% of GDP in 2023. The Economic Recovery and Growth Plan (ERGP), implemented by the government, targets diversification by investing in agriculture, services, and manufacturing. Notably, these efforts are starting to bear fruit, as seen in the steady rise in GDP, which grew by 2.8% in 2023, up from 2.2% in 2022. This growth is partly due to improvements in the business environment and increased investment in non-oil sectors.

“In 2024, Nigeria has an opportunity to turn the corner to a more stable and predictable macroeconomic environment, and easier access to foreign exchange (FX) and imported inputs, which is critical to creating new jobs and lifting people out of poverty”, said Alex Sienaert, World Bank Lead Economist for Nigeria

Tourism

Nigeria has enormous potential for tourism, which will add 4.5% of the country’s GDP in 2023. Tourists from over the world are drawn to the nation by its varied landscapes and rich cultural legacy. For example, in 2023 the Osun-Osogbo Festival drew over 100,000 guests, compared to 70,000 in 2022. To promote tourism growth, the government has made investments in infrastructure, including as renovating five main airports and expanding road networks.

However, challenges such as security concerns in certain regions and inadequate infrastructure in tourist hotspots remain. Despite these issues, the tourism sector is expected to grow by 6% annually over the next five years, according to the World Travel & Tourism Council.

Betting

The betting industry in Nigeria has seen explosive growth, with the market estimated to be worth $2 billion as of 2023. The sector has expanded rapidly, driven by mobile technology and internet penetration. Platforms like Bet9ja, with over 10 million users, and Surebet247 are at the forefront of this growth. The youth demographic, which makes up over 60% of the population, is particularly engaged, with sports betting on football being the most popular activity.

While the industry contributes significantly to the economy through taxes and employment, generating over 100,000 jobs, it also raises concerns. The National Lottery Regulatory Commission (NLRC) is tightening regulations to address issues such as gambling addiction and to ensure fair play. Despite these concerns, the sector is projected to grow at a rate of 10% annually, driven by the increasing popularity of sports betting in Nigeria and virtual games.

Nollywood

Nollywood, producing over 2,000 films annually, is a key driver of Nigeria’s cultural influence and economic growth. The industry contributes about 1.4% to Nigeria’s GDP, generating approximately $1 billion in revenue each year. Nollywood not only provides direct employment to over a million people but also indirectly supports many more through related industries such as marketing, distribution, and film production services.

The internationalisation of Nollywood is evident, with streaming giants like Netflix investing heavily in Nigerian content. In 2023, Netflix commissioned over 30 Nigerian films and series, reflecting the global demand for Nollywood productions. However, challenges such as piracy, which costs the industry an estimated $2 billion annually, and funding limitations continue to hinder its full potential.

Synergies and Future Prospects

In addition to being distinct success stories, Nollywood, betting, and tourism are becoming more and more entwined. With places from well-known Nollywood films turning into tourist destinations, film tourism is starting to take off as a potential growth industry. Furthermore, the betting and entertainment sectors may be able to generate new revenue streams through themed betting experiences connected to big-name films or sporting events.

In order to fully use these synergies, public and private sectors must work together to provide infrastructure and supportive policies for cross-sector growth. For instance, agreements between betting businesses and cultural events or incentives for film creation in popular tourist locations could spur economic growth and creativity.

A Brighter Economic Future

Nigeria is predicted to have a good future. Despite a long period of weak economic growth, the country has accumulated potential that will soon be released through reforms, and the main challenge is not to turn off this path.