By Anthony Otaru
Nigeria’s diversification story is gaining momentum, but the bigger challenge is turning growth into jobs, exports and industrial value. Stakeholders say the Federal Government must now concentrate resources on sectors with the strongest economic potential.
The latest indicators show agriculture, solid minerals and ICT expanding, strengthening the non-oil economy. However, weak value addition, financing constraints, infrastructure deficits and high production costs continue to limit their impact.
According to the National Bureau of Statistics, the non-oil sector contributed 96.08 per cent of Nigeria’s GDP in the first quarter of 2026.
Agriculture grew by 3.15 per cent during the period, compared with 0.07 per cent previously, while solid minerals, particularly metal ores and quarrying, recorded double-digit growth.
Non-oil exports also rose marginally to N3.19 trillion in the first quarter of 2026, from N3.17 trillion in the corresponding period of 2025.
The Nigerian Export Promotion Council reported that non-oil export earnings reached a record $6.1 billion in 2025, with agricultural commodities, processed products and solid minerals exported to 120 countries.
Yet, much of Nigeria’s agricultural and mineral output remains raw or semi-processed, limiting domestic value creation, industrial employment and export earnings.
For Dr Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Nigeria has largely completed its macroeconomic stabilisation phase.
He said the next challenge was translating improvements in inflation, exchange rates and reserves into productive capacity, stressing that economic management must ultimately reduce production costs and improve competitiveness.
Yusuf also warned that Nigeria’s export concentration had become more urgent following the United States’ 12.5 per cent tariff on selected Nigerian exports.
He noted that crude oil, liquefied natural gas and petroleum products account for more than 80 per cent of Nigeria’s exports to the United States.
He therefore urged Nigeria to accelerate export diversification and develop products capable of commanding greater value in international markets.
The solid minerals sector offers significant opportunities, but stakeholders say Nigeria must move beyond extracting minerals and exporting them without adequate domestic processing.
Minister of Solid Minerals Development, Dr Dele Alake, said mining revenue increased from about N6 billion at the beginning of the administration to N68.1 billion in 2025.
He also disclosed that more than $2.6 billion had been attracted into mining investments within two years, reflecting growing private-sector interest in Nigeria’s mineral resources.
Among the major projects are a $600 million lithium processing facility awaiting commissioning in Nasarawa State and another $200 million lithium plant near Abuja.
The Federal Government has indicated that it no longer wants Nigeria’s mineral resources exported simply as raw commodities without domestic processing.
“Under the Renewed Hope Agenda, Nigeria is determined to use its mineral wealth intelligently, responsibly and boldly to build national strength and contribute to continental progress,” Alake said.
Industry watchers, however, say mining growth remains concentrated around large projects and gold aggregation, while artisanal and illegal mining continues to undermine value retention and government revenue.
They argue that stronger regulation, formalisation and processing capacity are essential if mining is to become a major pillar of economic diversification.
CBN Governor Olayemi Cardoso said the apex bank was purchasing locally refined and aggregated gold through the Solid Minerals Development Fund under the National Gold Purchase Programme.
The initiative is aimed at conserving foreign exchange and strengthening reserves, while linking reserve accumulation to stronger non-oil exports, improved market functioning and capital inflows.
Agriculture remains central to Nigeria’s diversification strategy, but its economic potential will depend increasingly on processing, storage, finance, energy and access to markets.
The sector’s 3.15 per cent growth in the first quarter of 2026 indicates stronger momentum, while commodities such as cocoa and sesame are already reaching markets in the Netherlands, Brazil and India.
The National Agri-Food Systems Investment Plan 2026–2035 is expected to accelerate agro-processing zones across the six geopolitical zones and target a 40 per cent reduction in post-harvest losses.
The World Bank’s Agriconnect project is also expected to support agricultural transformation over six years and attract an additional $220 million in private agribusiness investment.
The project seeks to move smallholder farmers towards commercially oriented agriculture and connect them more effectively to productive value chains.
However, manufacturers say agricultural expansion will remain constrained unless production costs and infrastructure bottlenecks are addressed.
President of the Manufacturers Association of Nigeria, Ogun State chapter, Otunba Francis Meshioye, called for affordable finance, lower input costs, effective local-content enforcement and solutions to persistent energy challenges.
He said reliable and affordable energy was particularly important for agro-processing and manufacturing competitiveness.
ICT provides perhaps the strongest example of what sustained investment, private capital and enabling regulation can achieve within Nigeria’s diversification drive.
The sector contributed 9.54 per cent to nominal GDP and 11.31 per cent to real GDP in the first quarter of 2026.
Telecommunications alone generated N4.71 trillion and accounted for 9.19 per cent of real GDP, underlining the sector’s growing importance to the wider economy.
Minister of Communications, Innovation and Digital Economy, Bosun Tijani, said ICT had become one of Nigeria’s fastest-growing economic contributors.
He noted that its contribution had risen from less than five per cent about a decade ago to between 16 and 18 per cent, with government targeting 21 per cent by 2027.
Nigeria’s fintech industry further demonstrates the potential of technology-driven private investment.
Flutterwave, OPay, Moniepoint and Interswitch had a combined valuation of about $10.6 billion as of January 2026, while digital payments are estimated to contribute about $6 billion directly to the economy.
The experience of ICT suggests that government does not necessarily need to dominate productive sectors. Predictable regulation, infrastructure and private capital can create conditions for rapid expansion.
Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, said the Federal Government was pursuing targeted fiscal support, including duty exemptions on machinery and equipment imported for factories.
Speaking at the 7th Africa Emerging Markets Forum, Oyedele said: “One thing that is better than incentives is removing disincentives.”
The statement reflects a major concern across agriculture, mining and manufacturing: the cost of doing business can undermine the impact of government incentives.
Cheaper machinery, for instance, will have limited impact if businesses continue to face unreliable electricity, expensive logistics, multiple taxes and inadequate access to affordable finance.
Government’s ambition to build a $1 trillion economy by 2030 therefore requires greater productivity and competitiveness across sectors with strong growth potential.
However, the argument for concentrating resources on fewer sectors also carries risks. Nigeria’s economic structure is too diverse for government to assume that only a handful of industries can drive long-term growth.
A narrow sectoral strategy could expose the economy to fresh concentration risks, particularly if government support becomes excessively dependent on commodity prices, global demand or technological changes.
Agriculture, mining and ICT have different economic cycles and vulnerabilities. Maintaining a broader diversification base could therefore provide resilience against shocks affecting individual sectors.
The challenge, according to this perspective, is not necessarily choosing fewer sectors, but ensuring that every supported sector delivers measurable economic value and does not depend indefinitely on government protection.
This does not invalidate the case for consolidation. Instead, it suggests that government should prioritise sectors while maintaining policies that allow promising industries outside those priorities to emerge.
Despite the risks, the evidence increasingly suggests that Nigeria’s immediate problem is not a shortage of potentially productive sectors, but limited capacity to develop them effectively.
ICT has expanded rapidly through technology, private investment and enabling regulation. Mining is attracting major investments, while agriculture remains central to exports, employment and food production.
However, each sector faces different structural constraints. Agriculture needs processing and infrastructure; mining needs stronger regulation and domestic refining; while ICT requires continued investment and predictable policies.
The policy implication is that diversification should not mean trying to develop every sector simultaneously with limited resources.
The Federal Government should identify sectors with strong comparative advantages and concentrate fiscal support, infrastructure, financing and regulatory reforms around them.
Such consolidation would not mean abandoning other sectors. Instead, it would allow government to prioritise industries capable of creating significant spillovers across the wider economy.
Agriculture can stimulate manufacturing through agro-processing, packaging, logistics and equipment production, while mining can support industry when processing facilities and downstream value chains are developed.
ICT can improve productivity across agriculture, finance, manufacturing, logistics, education and public services, making it an important enabler of broader economic transformation.
The strategy, therefore, should be one of focused diversification: prioritising high-potential sectors while keeping the wider economy open to new industries and private investment.
Nigeria’s non-oil economy is becoming more resilient, but the next phase must convert that resilience into productive jobs, stronger exports, higher domestic value addition and sustainable revenue.
