Value of Nigeria’s consumer market could reach US$1.4 trillion by 2030, from the current yearly figure of about US$400 billion, a report by Mckinsey Global Institute (MGI) said yesterday.
MGI is a global business and economics research monitor focusing on developing deeper understanding of the evolving global economy, and providing leaders in the commercial, public, and social sectors with the facts and insights on which to base management and policy decisions.
The MGI report estimated that the value of Nigeria’s consumer market could reach US$1.4 trillion by 2030 with food and non-food consumer goods accounting for US$1 trillion of the total.
In the report, entitled, “Nigeria’s renewal: Delivering Inclusive Growth in Africa’s Largest Economy’’, MGI said one of the most important under-appreciated changes in Nigeria was the growing size and strength of its consuming class.
“While the middle income is 680 dollars per year and 43% of the population lives below the poverty line, the number of households in the consuming class is growing rapidly,” the report said.
“In 2013, an estimated eight million households had income of more than 7,500 dollars per year, the threshold which MGI considers as ’emerging consumers’, with sufficient income to meet all basic necessities and have money to start buying more and better food as well as health and education services,” it added.
The report said the labour productivity in the country had grown by 3.6% per year since 2010 and had contributed to the greatest share of its Gross Domestic Product (GDP).
The report said the oil and gas sector had many opportunities to improve productivity, adding however, that the large share of the economy that existed outside oil and gas was where the productivity gap to other countries emerged.
It explained that the recent rebasing of the economy had demonstrated that the natural resources sector was a smaller share of the country’s economy, thus clearing the misconception by people outside Nigeria that the oil sector is the engine of growth in the Nigerian economy as it is with several Middle Eastern economies.
The report, however, said in spite the improvement in labour productivity, Nigeria was still far behind other major developing economies.
“At less than 9,500 dollars per worker per year, Nigerian output is 58% less than the average of seven large developing economies. Nigeria also has a low ratio of employment to population of 31% compared with 52% in Brazil, 46% in Indonesia and 48% in Russia”, the report added.
It said productivity is also being held back by poor infrastructure, which increases the cost of doing business in the country.