Is Nigeria on track to realise its rich potential?
Fixing its banks and power shortages would go a long way towards setting Nigeria on a sustainable growth path. The government has recently taken two steps in the right direction.
Last month, president Goodluck Jonathan approved the creation of a 'bad bank' to allow the country's troubled banks to unload their non-performing assets. The need for an asset management company to perform this role has been on the cards ever since Nigeria's central bank governor, Lamido Sanusi, moved on the sector last year, bailing out nine banks and changing the management at eight of them.
It will still be some time before Nigerian banks are lending normally and private sector credit is expected to fall from 42.6% of gross domestic product (GDP) in 2009 to 36% in 2010.
There are also other barriers to lending that need addressing, such as the issue of property rights. But the work-out scheme will start to get the banks back in better shape, even though arguments with shareholders about asset prices can be expected.
With energy there are even more vested interests to struggle against and, as we report in this month's cover story, not much can be achieved by the private sector unless government policy is correctly implemented. The good news is that Mr Jonathan is behind energy reform and officials have begun preparing the sale of the broken state-owned electricity system despite considerable opposition.
Nigeria desperately needs a power uplift so that its businesses and households can close down their costly diesel generators.
On some estimates, lack of power deprives Nigeria of economic activity worth half its current GDP.
With banks and energy running smoothly, only the sky would be the limit.
