The Service Sector in Nigeria: An Escalator for New Economic Growth

Abstract: The Nigerian economy grew at an average rate of 7% between 20002011. However, recent drop in oil prices has led to calls for economic diversification away from oil. Using the services-led growth theoretical framework, this thesis provides an overview of the Nigerian service-sector. Through an analysis of descriptive statistics, the thesis showed that services have been contributing significantly to Nigeria's GDP, employment, trade and capital imports in the last 15years. The thesis contends that the problem of the Nigerian economy is not lack of diversification per se, but enhancing the performance of other sectors. As a knowledge-intensive sector, enhancing services will require the possession of adequate skill and knowledge base as established in the human capital literature. A brief historical narrative on Nigeria's higher education system is therefore used to show that Nigeria already has an elaborate higher education system, demonstrated by increase in the number of institutions, and demand for university studies. However, issues of low funding and weak infrastructural capacity poses a challenge to the system. Thus, for Nigeria to improve, benefit from, and ensure sustained growth through services, it will have to do more to improve its provision for education.