Constraints to Economic Development and Growth in Nigeria

This paper investigated the constraining factors to economic development in Nigeria in the past four decades. The results showed that the constraining factors to the country’s quest to achieve accelerated economic development and growth are both social and economic. The social constraining factor identified in the paper is rent seeking as proxied by corruption index, and economic factors include electricity supply, human capital and roads. The study also showed that the depth of the financial sector, market size and trade openness are important determinants of economic growth and development. The findings of this study suggests that there are significant gaps in the availability and quality of infrastructure, human capital and the level of rent seeking behavior that policy-makers need to address. The study recommends that Narrowing and ultimately eliminating these constraints are necessary steps in addressing broader development goals as outlined in Vision 20:20 documents and hence should be among the key policy options of government. Public and private sector partnership is important in this regard. Albeit economic development and growth would be largely driven by a dynamic private sector, there is a crucial role for government to provide the required support infrastructure for the private sector to thrive, especially where the market failed to provide such support infrastructure efficiently. This requires substantial investment by both government and private sectors in electricity supply, roads, human capital and grow the depth of the financial sector.