A key regional player in West Africa, Nigeria accounts for about half of West Africa’s population with approximately 202 million people and one of the largest populations of youth in the world. With an abundance of natural resources, it is Africa’s biggest oil exporter and has the largest natural gas reserves on the continent.
Nigeria is highly vulnerable to the global economic disruption caused by COVID-19, particularly due to the pronounced decline in oil prices and spikes in risk aversion in global capital markets. Nationally, 40 percent of Nigerians (83 million people) live below the poverty line, while another 25 percent (53 million) are vulnerable. With COVID-19, many of these 53 million vulnerable people could fall into poverty. The magnitude of the health impact depends on the duration and the domestic spread of the outbreak, while the economic impact hinges on oil prices. Oil accounts for over 80 percent of exports, a third of banking sector credit, and half of the government revenues. Oil prices also affect growth in non-oil industries and services, with additional pressures arising from foreign portfolio investors’ reassessment of risks and domestic liquidity management.
While Nigeria has made some progress in socio-economic terms in recent years, its human capital development remains weak due to under-investment. It ranked 152 of 157 countries in the World Bank’s 2018 Human Capital Index. The country continues to face massive developmental challenges, including the need to reduce the dependency on oil and diversify the economy, address insufficient infrastructure, build strong and effective institutions, as well as address governance issues and public financial management systems. These pre-existing structural challenges have left the Nigerian economy especially vulnerable to the COVID-19 outbreak and its consequences.
HOW TO EXPAND YOUR BUSINESS IN NIGERIA THE SMART WAY.
Africa HR Solutions offers Employer of Record services in Nigeria to facilitate your workforce management on the African continent:
- Hire people on the African continent without a registered entity
- Complete payroll rundown and management
- A central point of contact for all your queries
- Guaranteed compliance to local laws
- Professional indemnity and employer liability
As always, Africa HR Solutions guarantees 100% compliance for your business operations in Africa.