NESG Warns Infrastructure Gaps Are Stifling Nigeria’s Productivity and Investment Growth

The Nigerian Economic Summit Group (NESG) has raised concerns that the country’s chronic infrastructure deficits are severely undermining productivity and discouraging both domestic and foreign investments. The policy think-tank noted that inadequate power supply, poor transportation systems, weak logistics networks, and insufficient digital connectivity continue to constrain Nigeria’s economic potential despite its vast resources and youthful population.

Speaking during a recent economic briefing, NESG officials emphasized that infrastructure remains a critical enabler of sustainable economic growth, yet Nigeria’s infrastructure stock falls far below international benchmarks. The group highlighted that with the country’s infrastructure-to-GDP ratio estimated at about 30 percent—far lower than the global average of 70 percent—significant gaps remain in delivering basic services that drive productivity and business competitiveness.

The NESG argued that these deficits translate into high operational costs for businesses, thereby discouraging new investments and limiting expansion for existing enterprises. Power supply remains a major bottleneck, with frequent outages forcing businesses to rely on costly alternative energy sources. Manufacturing firms, in particular, face enormous costs running diesel generators, which eat into profit margins and erode competitiveness.

Beyond electricity, the state of Nigeria’s roads and rail infrastructure also poses serious challenges for efficient logistics. Poor transport networks make the movement of goods within and across states expensive and time-consuming, resulting in high post-harvest losses in agriculture and delays in manufacturing supply chains. Ports congestion and bureaucratic bottlenecks further exacerbate trade inefficiencies, adding to the cost burden for investors.

NESG analysts noted that these factors are directly linked to the country’s declining attractiveness to foreign direct investors. According to recent data, Nigeria has witnessed a significant drop in capital inflows, a situation many analysts attribute to policy inconsistencies and the high cost of doing business, which is worsened by inadequate infrastructure. They stressed that without urgent interventions, the country risks missing out on opportunities to attract investors seeking emerging markets with competitive advantages.

The group also pointed out that digital infrastructure remains underdeveloped, with limited broadband penetration and insufficient technological infrastructure to support innovation-driven enterprises. In an era where economies are increasingly leveraging technology for productivity gains, Nigeria’s lag in this sector poses a major competitive disadvantage. NESG urged increased investment in ICT infrastructure to enable growth in the digital economy and related sectors.

On financing solutions, the NESG advocated for stronger public-private partnerships (PPPs) to bridge the country’s huge infrastructure funding gap, estimated at over $100 billion. They emphasized that government resources alone cannot meet the scale of investments required. Instead, private sector participation, supported by policy reforms and regulatory clarity, will be key to unlocking capital for critical infrastructure projects.

NESG also called for improved governance and accountability mechanisms to ensure that funds allocated for infrastructure are effectively utilized. Past experiences of project abandonment and cost overruns have undermined investor confidence. The group stressed that transparency in project execution and monitoring will be essential to attract both local and international financing.

Highlighting the broader implications of infrastructure gaps, NESG warned that continued neglect will further weaken Nigeria’s productivity levels and limit its ability to compete with other emerging economies. They noted that poor infrastructure not only deters investment but also contributes to unemployment and poverty, as businesses struggle to grow in an unfriendly operating environment.

To address these issues, NESG recommended prioritizing infrastructure development as a central pillar of Nigeria’s economic reform agenda. This includes adopting innovative financing models, streamlining regulatory processes, enhancing security around critical infrastructure assets, and ensuring policy consistency to build investor confidence.

The group further urged government at all levels to create enabling conditions for private investments by addressing macroeconomic instability, ensuring contract enforcement, and providing incentives for long-term infrastructure financing. They added that collaboration between federal and state governments is critical for aligning development plans and maximizing the impact of infrastructure projects.

As Nigeria seeks to diversify its economy away from oil dependency, NESG insists that improved infrastructure will be key to unlocking the potential of sectors such as agriculture, manufacturing, technology, and services. With the African Continental Free Trade Area (AfCFTA) creating new opportunities for regional trade, Nigeria risks being left behind if it fails to upgrade its infrastructure to meet global competitiveness standards.

NESG’s warning comes at a time when other African economies are aggressively investing in infrastructure to attract investment and stimulate economic growth. The think-tank concluded that Nigeria must act decisively to close its infrastructure gaps to avoid falling further behind its peers. They emphasized that the path to sustainable development hinges on strategic and sustained investment in critical infrastructure that will drive productivity, create jobs, and lift millions out of poverty.