A MULTI-METRIC ENTROPY-BASED ANALYSIS OF GDP DIVERSIFICATION IN NIGERIA (1990–2024)
Keywords:
Economic Diversification, Shannon Entropy, Structural Transformation, Nigerian Economy, Premature De-industrialization, GDP StructureAbstract
This study examines the structural transformation and sectoral diversification of Nigeria’s economy from 1990 to 2024. Four complementary measures are applied to annual GDP data across agriculture, industry, and services: Shannon entropy, the Herfindahl–Hirschman Index (HHI), Theil’s Index, and Shift–Share Analysis. The results reveal a diversification paradox. Although Nigeria’s overall diversification remained moderate throughout the period, the economy experienced a sharp industrial contraction alongside rapid service-sector expansion, producing increasing sectoral imbalance. Diversification peaked in 2002–2003 and has declined steadily since, with entropy decomposition confirming that service-led growth has reinforced concentration rather than balance. These findings point to the need for a second-generation diversification strategy that targets within-sector development, productive linkages, and export orientation.
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