Nigeria suffers financial downturn as GDP/capita falls 72% – IMF

Africa’s largest oil producer, residence to over 200 million folks, has witnessed a worsening financial downturn in 10 years, with its GDP per capita plummeting by 72.35 per cent.

Knowledge obtained from the web site of the Worldwide Financial Fund indicated that Nigeria’s GDP per capita declined from $3,022 in 2014 to only $835.49 in 2024, signaling a pointy contraction within the common financial output per individual.

The nation’s whole Gross Home Product—the general worth of products and providers produced—additionally fell steeply, from $568.5bn recorded in 2014 to $194.96bn in 2024, marking a staggering 65.71 per cent decline over the interval.

Past the contraction in financial output, Nigeria’s actual GDP progress has additionally slowed significantly.

The IMF information confirmed that actual GDP progress, which measures financial growth adjusted for inflation, stood at 6.3 per cent in 2014 however has dropped to 2.9 per cent in 2024.

The financial disaster has been exacerbated by coverage reforms initiated in 2023 below President Bola Tinubu, who’s at present in Ethiopia for the African Union summit, only a week after visiting Emmanuel Macron in France.

The gasoline subsidy removing— one of many reforms, triggered a pointy enhance in petrol costs, fueling inflation that surged to 34.8 per cent in December 2024.

The simultaneous devaluation of the naira additional eroded buying energy, driving up import prices and worsening inflationary pressures.

Nigeria can be struggling to fulfill its oil manufacturing targets below the Organisation of Petroleum Exporting Nations, limiting overseas trade earnings.

Tinibu’s efforts to stabilise the economic system haven’t yielded the specified consequence regardless of claims by his political allies that there have been indicators of progress.

Nevertheless, economists say that regardless of official assertions of financial restoration, key indicators paint a bleak image.

“There’s an phantasm of financial progress,” former Chief Economist at Zenith Bank, Marcel Okeke advised Saturday PidomNigeria.

“The federal government is asking residents to tighten their belts, but the truth is that the economic system is in persistent decline. The numbers present we’re continuously shifting backward.”

Okeke highlighted the worsening inflation price, which jumped from 22.4 per cent in Could 2023 to 34.8 per cent in December 2024. “What actual progress are we speaking about when inflation is hovering?” he requested.

He additionally pointed to the naira’s fast depreciation. “In Could 2023, the trade price was under N500 per greenback. In the present day, it fluctuates between N1,000 and N1,500 per greenback regardless of authorities interventions,” he stated.

Gas costs have surged as effectively, with Premium Motor Spirit rising from under N200 per litre in Could 2023 to almost N1,000 per litre. “This reinforces the argument that the economic system is in a gradual state of decline,” Okeke added.

The Nationwide Bureau of Statistics deliberate to rebase the nation’s GDP and Shopper Worth Index by January 2025, a transfer geared toward offering a extra up to date financial evaluation.

Nevertheless, Okeke cautioned that changes to financial indicators might create a deceptive impression of progress.

“The federal government might try to arrive at figures that counsel financial enchancment, however the actuality on the bottom is totally different. Tens of millions stay unemployed, and even these with jobs are struggling as salaries lose worth,” he stated.

Okeke additionally dismissed the importance of rising federal allocations, arguing that elevated income distribution has not translated into improved dwelling requirements.

“A 50kg bag of cement value N2,000 or N3,000 after we had been sharing lots of of billions. Now that trillions are being allotted, cement prices N9,000 or N10,000. What has modified for the higher?” he questioned.

He described Nigeria’s financial state as “constantly retrogressive,” with no indicators of reversal. “Individuals are leaving the nation in droves, looking for higher livelihoods. Even these with jobs are barely surviving. The federal government might have a good time figures, however actuality tells a special story,” he stated.

Oil stays Nigeria’s dominant overseas trade earner, accounting for over 90 per cent of whole export worth. The nation has struggled lately to fulfill its OPEC manufacturing quota, additional straining authorities income.

Nevertheless, OPEC reported this week that Nigeria’s crude oil manufacturing rose to a mean of 1.53 million barrels per day in January, marking the primary time the nation met its 1.5 million bpd quota because it was set at OPEC’s ministerial assembly on November 30, 2023.

Regardless of this short-term enhance, analysts warning that structural challenges—starting from pipeline vandalism to underinvestment—proceed to threaten manufacturing stability.

Growth economist Aliyu Ilias attributed Nigeria’s low GDP per capita to the extended depreciation of the naira.

“The naira has fallen from about N300 per greenback to over N1,500 per greenback. Taking a look at key financial indicators, there isn’t any signal of enchancment,” he advised Saturday PidomNigeria.

He additionally identified that Nigeria’s 2025 finances displays these financial challenges. “In greenback phrases, the 2025 finances is decrease than 2024’s, highlighting the monetary pressure,” he famous.

In accordance with Ilias, reversing the decline in GDP per capita requires pressing coverage motion. “To attain financial progress, Nigeria should enhance manufacturing, steadiness commerce, enhance safety, and guarantee meals and vitality safety.

“With out addressing these elementary points, our GDP will proceed to wrestle, and GDP per capita won’t enhance,” he stated.