What Nigeria Can Learn From India’s Economic Success

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Gangadharan Balasubramanian, India’s High Commissioner to Nigeria
Gangadharan Balasubramanian, India’s High Commissioner to Nigeria

Nigeria and India are very similar countries in population, economy, post-colonial struggles, and even diaspora engagement – except that India’s economy has shot far ahead. There are a few key lessons that the Nigerian government can take from India, according to studies done by KPMG and the Confederation of Indian Industry, and PWC.

Nigeria’s economy has been expanding for decades, and now it’s considered a “middle-income” country and a Newly Emerging Economy (NEE). President Buhari’s government was successful at luring more foreign investment and brokering oil deals, with the primary goal of diversifying the economy. With the new president-elect Tinubu, we can expect more of the same efforts to improve business nationwide.

Both countries are considered “newly emerging economies” due to significant rapid GDP growth and diversifying economies, with India pulling ahead of Nigeria and not just because of the populace. Nigeria has a large population for a country of its size, and only 35% use the internet. India’s internet usage has also blasted off, with 48.8% of citizens reporting internet access and regular usage.

This small factor dramatically impacts the profitability of many industries in Nigeria.

Nigeria’s fastest-growing industry is transport and storage, while countries like India focus on IT and technological growth. This failure to catch up technologically with the rest of the world, along with previous civil wars and ethnic disputes, has given way to a sizeable Nigerian diaspora around the world – something the Indian government is all too familiar with. According to India’s High Commissioner to Nigeria, Gangadharan Balasubramanian, engaging with the diaspora is vital to the overall long-term health of the country and economy.

Thousands of Indian students go abroad yearly, but Balasubramanian called this “brain circulation” rather than “brain drain,” as many countries do. While not every student comes back to India, many do, developing their communities as they come back with higher education and connections from various countries around the world. Nigerian students also return, but the return rates aren’t quite high enough. Students returning from other areas of the world bring a technological education that often helps them make a much larger income than domestic schooling would have.

The new Nigerian presidency must begin to push technological industries to develop, including widespread internet usage. According to a new Statista report, only 44% of Nigerians have access to smartphones, which limits their advertising, gaming, gambling, rideshare, food delivery, and communication industries. However, the government of Nigeria has been conservative when it comes to passing laws that would allow specific sectors to flourish.

Whereas the Covid-19 pandemic shutdown helped push Indians further online, so did the online capabilities in Nigeria. Those with access to the internet participate in the same activities as everyone else – streaming, scrolling, social media, sports betting, etc. India has used this boom to bring in tax revenue from these big businesses. Stimulating Nigeria’s economic growth through online gambling and expanding convenience industries (companies like Jumia Food) will be essential for the future.

Both India and Nigeria are open opportunities for foreign investment and new businesses. According to a PWC report, both countries must continue to focus on creating domestic opportunities at home. However, the same reports say that allowing some foreign companies to take the lead will eventually create more paths for large domestic tech companies.

Another missed similarity in both economies, stated by the PWC report, is the inequality between male and female workers. Both India and Nigeria have similar issues with gender equality, especially in rural and impoverished areas. While the last decade has seen some strides in the education of women and their employment, unfortunately, by not giving out well-paying opportunities to women, all of these industries are missing a large chunk of a capable workforce.

India and Nigeria are countries that share many of the same problems and the same opportunities because of their political status, but luckily have recognized these similarities and created a strong partnership. With plenty of migration between the countries and plenty of trade agreements, we’re likely to see both India and Nigeria continue to grow into economic forces in the next several decades.