Medan — The economic potential of the Nias Islands in North Sumatra remains heavily dependent on natural resource-based sectors, especially agriculture, forestry, fisheries, and mining. However, a recent study by Nadya Keisha Ferdinasari and Syamsul Huda from UPN “Veteran” East Java in 2026 found that these leading sectors have not yet made a significant contribution to regional economic growth. The findings are important because the Nias Islands are still categorized as underdeveloped areas and require more effective development strategies.
The Nias Islands consist of Nias Regency, South Nias Regency, North Nias Regency, West Nias Regency, and Gunungsitoli City. Four of these areas are still classified as underdeveloped regions under Indonesia’s national development acceleration policy. Their geographical isolation from mainland Sumatra remains a major obstacle. High transportation costs, weak connectivity, and limited market access continue to slow economic progress compared to other regions in North Sumatra.
Published in the International Journal of Scientific Multidisciplinary Research (IJSMR), the study analyzed Gross Regional Domestic Product (GRDP) data from 2015 to 2024 across the five administrative regions. The researchers used regional economic analysis tools to identify leading sectors, growth prospects, competitiveness, and their impact on economic growth.
The findings revealed that agriculture, forestry, and fisheries remain the dominant base sectors in most parts of Nias. Mining and quarrying also emerged as strong economic foundations across the islands. In contrast, Gunungsitoli City showed a different pattern, with service sectors such as trade, transportation, and education acting as its main economic drivers.
The study also identified a gradual structural shift from primary sectors toward secondary and tertiary sectors. Transportation, warehousing, accommodation, food services, information and communication, and real estate were found to have promising future growth prospects. This indicates that economic diversification is beginning to emerge, although it remains uneven across the islands.
One of the most striking findings came from the regression analysis. Both leading and non-leading sectors showed negative and statistically insignificant effects on economic growth. The significance level for leading sectors was 0.119, while non-leading sectors recorded 0.133. This means that increases in these sectors have not yet translated into measurable regional growth.
According to Nadya Keisha Ferdinasari from UPN “Veteran” East Java, this condition suggests that Nias’ economic potential has not been fully optimized. Agriculture and mining remain the backbone of the economy, but their added value is still low because downstream industries remain underdeveloped. Most products are still sold in raw form without processing, limiting their economic benefits.
The study also found that Gunungsitoli City is the only region categorized as rapidly developing under the Klassen Typology, while the other four regencies remain relatively underdeveloped. This highlights internal disparities within the Nias Islands that require stronger government attention.
The implications are clear. Policymakers need to focus not only on strengthening primary sectors but also on developing processing industries, improving human capital, upgrading infrastructure, and strengthening regional connectivity. Without these steps, Nias’ leading sectors may remain untapped potential rather than effective engines of growth. For businesses, the findings reveal significant investment opportunities in agricultural, fishery, and mining downstream industries.
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