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By Olamide Eyinla

Nigeria’s 2025 sectoral performance data tell an uncomfortable story.

A handful of sectors are racing ahead.

Transportation and Storage grew 16.9%, Finance and Insurance 14.5%, Water 10%, Other Mining 9.7%, Arts and Entertainment 9%, Oil and Gas and Electricity both 8.5%, ICT 6.9%.

Sustained, those rates would transform the country within a decade. But the heaviest sectors by share of GDP Agriculture (27.6% of GDP, growing 2.9%), Trade (17.4%, growing 1.8%), Real Estate (13.6%, growing 3.8%) and Manufacturing (8.1%, growing only 1.4%) are barely keeping pace with population growth. Public Administration (2%), Education (2.4%) and Human Health (2.5%) are similarly sluggish.

Add it up: the six laggard sectors carry 63% of GDP between them but contribute just 33% of growth. The driver sectors hold 34% of GDP yet deliver 58% of growth. Nigerian growth is concentrated in sectors that employ relatively few people, while the labour-intensive sectors that feed and employ most Nigerians stagnate. We are growing at the top while the base goes flat.

This is not a problem federal policy alone can solve. Most commentary on Nigeria’s economy stops at Abuja. That is half the diagnosis. Schools, primary healthcare, feeder roads, market sanitation, agricultural extension and embedded electricity generation are constitutionally or operationally the business of state and local governments. The 1999 Constitution distributes powers across three tiers; reform must be built across all three.

Here is what each tier must do, sector by sector.

Agriculture employs more Nigerians than any other sector and contributes more to GDP than any other. That it grew at only 2.9%, barely above population growth, is the single largest drag on prosperity.

The binding constraint is insecurity. Banditry across the Middle Belt and North-West has collapsed production cycles in states that feed the nation. You cannot raise productivity on farmland you cannot reach.

The Federal Government must pass enabling legislation for state police and properly regulated forest guards. It must concentrate joint security forces in 8–10 priority production corridors the Niger–Kebbi rice belt, the Benue–Taraba grain and yam belt, the Oyo–Ogun cassava belt, and others under unified operational command.

It must honour the Maputo commitment to allocate at least 10% of the budget to agriculture; current allocation hovers below 2%.

State Governments control land under the Land Use Act and must build digital land registries that allow smallholders to title and pledge their land as collateral. They must deliver the supporting infrastructure for the Special Agro-Industrial Processing Zones now being rolled out across 28 states with African Development Bank financing.

They must exit free-tractor politics that crowds out private mechanisation services like Hello Tractor and Babban Gona, replacing populist procurement with matching grants to scaled private operators.

Local Governments are responsible for intra-LGA roads. A reliable feeder road from a farm cluster to the trunk road is the single highest-return investment in post-harvest loss reduction, as losses currently run 30–50% on perishables. LGs must also rebuild market sanitation, cold storage and weighing infrastructure, and restore ward-level extension services. The FAO recommends one extension officer per 500 farm households; Nigeria currently averages one per 5,000–10,000.

Foreign exchange access has materially improved since the 2023 naira float. The binding constraints now are energy cost, port inefficiency, policy reversals, and finished-goods smuggling that undermines domestic producers. Each is fixable.

The Federal Government must enforce its own 2026 reforms. The 127-item National List restructured tariffs to 0–10% on industrial inputs and 20–70% on finished imports, but it only works if Customs interdicts smuggling through Seme, Idiroko, Jibiya and the northern corridors.

The new Economic Development Incentive, offering a 5% capex tax credit for five years will only attract investment if the Nigeria Revenue Service publishes clear, non-discretionary qualification criteria, avoiding the opacity that discredited the old Pioneer Status. Manufacturers ask for one thing above all: a binding commitment to 36-month policy stability on tariffs, taxes and FX rules.

State Governments hold the most underused power of all under the Electricity Act 2023: the authority to license generation and distribution. Lagos, Ogun, Rivers, Kano, and Kaduna, hosts of Nigeria’s industrial clusters, should prioritise cluster-level 5–20MW gas-fired plants serving multiple factories at industrial estates. Per-unit power costs fall 40–60% versus diesel self-generation; manufacturing margins move from negative to positive. States must also rehabilitate the industrial estates themselves, Agbara, Ikeja, Ota, Nnewi, Kano-Bompai. Their current state actively repels investment.

Local Governments must end the multiple informal levies that plague trucks moving goods across LG boundaries. Published rate schedules, prosecuted extortion, and reliable municipal services within industrial estates, drainage, lighting, and waste are LG deliverables.