Private Sector Development in Nigeria: Getting the Basics Right

The Nigerian President has vowed to create an enabling environment for private sector development in Nigeria [http://www.thisdaylive.com/articles/jonathan-hard-economic-decisions-on-the-way/94057/]. The President has also promised to protect local industries from foreign competition. While this sounds like a good way to help the growth of local industries in Nigeria (if well implemented), it is also not a magic bullet for private sector development. Protectionism is not new in Nigeria. Nigeria’s trade policy to some extent is focused on trade protectionism through import bans to protect its local industries against competition from foreign firms. This has not boosted local industries in Nigeria, rather only few industries have benefited from it. On the contrary, the main success story of Nigeria’s private sector has been largely driven by foreign direct investment in the telecommunication sector from companies like MTN which has created employment opportunities and small businesses for many Nigerians. The Nigerian government should focus on keeping to its promise of  reducing the over all cost of doing business in Nigeria which would involve addressing the power crisis, maintaining roads  and improving security in order to boost private sector development. This would be beneficial to both local industries as well as attract foreign direct investment to Nigeria.