The arrival of Indian Prime Minister Narendra Modi in Nigeria marks a pivotal moment for both nations, offering opportunities to expand economic cooperation and address shared challenges. With India’s $27 billion investment footprint in Nigeria, this visit underscores the strategic partnership between Africa’s largest economy and the world’s most populous nation.
Strengthening Bilateral Trade Ties
India is Nigeria’s largest trading partner, with bilateral trade reaching $14.95 billion in 2023. Nigeria supplies India with crude oil, accounting for 20% of India’s energy imports, while India exports pharmaceuticals, machinery, and technology to Nigeria. Modi’s visit aims to diversify this relationship beyond energy, tapping into sectors like agriculture, technology, and defence.
Nigeria’s economy, which has struggled with revenue diversification, can benefit significantly from Indian expertise. For instance, India’s advancements in agricultural technology could help Nigeria maximise its $432 billion agricultural sector, which employs over 35% of its workforce but remains underdeveloped due to outdated methods.
Progressively, as Nigeria grapples with severe economic challenges, such as rising inflation, high unemployment, and a depreciating naira, Prime Minister Modi’s visit offers a potential remedy. With India managing an inflation rate of 4.6% and recording a GDP growth of 6.1% in 2023, Nigeria could leverage its partnership with a relatively stable economy. Modi’s strategies in boosting domestic production and attracting foreign investments might provide Nigeria with insights to address its own economic vulnerabilities
Investments in Industrialisation and Manufacturing
India’s industrial growth model offers insights for Nigeria, whose manufacturing sector contributed only 9.5% to GDP in 2023. India’s “Make in India” initiative, which transformed its industrial base, can serve as a blueprint. Modi’s discussions with President Tinubu could lead to joint ventures, enabling Nigeria to enhance its industrial capacity and reduce its $20 billion annual import bill for machinery and manufactured goods.
The presence of over 200 Indian companies in Nigeria highlights the potential for deeper collaboration. Firms like Tata and Indorama already operate successfully, demonstrating the value of partnerships in infrastructure development, petrochemicals, and transportation.
Technological and Human Capital Development
India is a global leader in technology and pharmaceutical production, supplying over 50% of the world’s vaccines. Nigeria, on the other hand, has a health sector plagued by insufficient funding, with healthcare expenditure accounting for only 3.75% of GDP in 2023. By fostering collaboration, India could support Nigeria in establishing pharmaceutical manufacturing hubs, reducing dependency on imports and creating jobs.
Additionally, India’s success in information technology could inspire similar developments in Nigeria’s tech sector, which generated $2 billion in investments in 2022 but still lacks the infrastructure for scalability. Indian IT giants like Infosys and Wipro could mentor Nigerian startups, accelerating growth in areas such as software development, AI, and digital banking.
Energy and Renewable Collaboration
As the world transitions to cleaner energy, India’s expertise in renewable energy offers a pathway for Nigeria to achieve energy sustainability. While Nigeria has one of the lowest electricity access rates globally, with 55% of its population lacking reliable power, India has successfully electrified over 99% of its villages. Collaboration in solar and wind technologies could help Nigeria leverage its vast renewable energy potential, estimated at 427,000 MW.
Shared Challenges and Mutual Benefits
Both countries face economic challenges such as inflation and unemployment. India’s inflation rate was 4.6% as of October 2024, while Nigeria’s stood at 26.7%. Unemployment in Nigeria, which affects 33.3% of the labour force, can be mitigated through Indian investments in labour-intensive sectors like manufacturing and agriculture.
Moreover, the Nigerian government could study India’s success in implementing digital public infrastructure such as Aadhaar, which revolutionised service delivery and financial inclusion for over 1.3 billion Indians. Adopting similar frameworks could enhance Nigeria’s financial inclusion rate, which stands at 64%, and unlock its digital economy potential.
Conclusion: A Partnership for the Future
Prime Minister Modi’s visit to Nigeria has the potential to redefine the economic relationship between these two nations. By leveraging their comparative advantages, Nigeria and India can create a symbiotic partnership that addresses immediate challenges while paving the way for long-term growth. With the right policies and collaborations, this historic visit could catalyse a new era of economic prosperity for both countries. This visit, if followed by concrete action plans and sustained dialogue, could mark the beginning of a transformative era in Nigeria’s quest for economic stability and growth.
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