Nigeria’s GDP per capita surged 21 percent to $1,095 following the rebasing of the country’s economy, which took more informal sectors into account. But this is still relatively lower when compared to top economies on the continent.
Africa’s most populous nation’s income per person stood at $877 in 2024 as per estimates by the International Monetary Fund (IMF), with projections to shrink to $835 this year. But with the revision of the country’s economy, the GDP per capita now surged to $1,095, according to calculations by BusinessDay.
With a population of at least 230 million people and a rebased GDP of $251 billion (N372 trillion), Nigeria’s per capita income still falls within the low-income category of $1,135 or less as per the World Bank classifications.
This suggests that despite the rebound, Nigerians are far from being off the whims and caprices of the worst cost-of-living crisis in a generation and deepening poverty levels which surged by more than 24 percent in one year, according to the World Bank data.
Read also: IMF retains Nigeria’s GDP growth at 3.4 % after rebasing
However, South Africa with about 64 million people boasts a per capita GDP – that’s more than six times of Nigeria’s, suggesting a better-by-far living standard in Africa’s biggest economy.
Ghana’s income per person is over twice of Africa’s most populous nation. The only country that trails behind Nigeria as per GDP per capita is Ethiopia with $1,066.
“Nigerians are less well-off and have lower standards of living than last decade or compared to many other frontier markets including our African neighbours,” said Samuel Sule, chief executive officer of Renaissance Capital Africa, a Lagos-based research & investment bank.
Naira fall shrinks GDP by over $323bn in a decade
Nigeria has lost more than half the value of its economy ($323 billion) in nominal dollar terms over the past decade as repeated currency devaluations, low productivity and stagflation eroded the country’s global economic standing, even amid recent reforms.
New data from the National Bureau of Statistics (NBS) shows Nigeria’s rebased GDP stood at $251 billion in 2024 (using 2024 average FX rate of N1,484.99/$), sharply down from $574.2 billion in 2014, when the economy was last rebased.
The more than 56 percent decline reflects not just weaker output but the dramatic depreciation of the naira over the last 10 years. Though the value of the economy has grown in naira terms, it has shrunk massively compared to dollar terms.
CFG Advisory Group attributes the decline to “devaluation, low productivity, and stagflation,” a condition that’s resulted in the country slipping to fourth largest economy in Africa even after recent rebasing.
“The country is no longer the largest economy in Africa, ranking fourth behind South Africa, Egypt, and Algeria. This is owing to the prolonged policy inconsistency since the economy came out of the post-COVID recession,” the Lagos-based consultancy firm stated in a report earlier this year.
The steep fall in dollar GDP comes despite ongoing efforts to restore investor confidence through market-friendly reforms, including a full float of the naira, fuel subsidy removal, and the opening of the FX market. While these moves have been applauded, they have yet to meaningfully reverse the currency’s long slide or lift real per capita incomes.
Read also: Rebased GDP: Separating facts from fiction
Low in dollar terms
Adeola Adenikinju, president of the Nigerian Economic Society, said Nigeria’s GDP has grown in naira terms but has reduced in dollar terms due to the exchange rate depreciation, calling for more diversification of the economy to increase productivity.
“The exchange rate has reduced significantly in the last two years, contributing to the decline in GDP measured in dollar terms. In real terms, naira GDP has grown albeit at a very slow rate,” Adenikinju stated.
The naira exchanged between 168/$ and 199/$ in 2014 when the last rebasing was done. However, it averaged N1,484.99/$ last year, after the currency shed some 70 percent of its value after exchange rate control was relaxed in 2023.
This steep fall in the value of the currency has slashed the dollar value of national output, undermining Nigeria’s relative weight in Africa and global markets.
But the naira has maintained a rare relative stability so far this year, with analysts seeing the currency extending its rally till the end of the year and probably hitting N1400/$ by year-end.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, maintained that while the depreciation in exchange rate has dealt a heavy blow on the size of the economy, “Nigeria’s economic activities have not contracted that much.”
“GDP growth has been positive, apart from the COVID period where we recorded a negative,” Yusuf said.
For Nigeria to become Africa’s largest economy again, Yusuf said the GDP has to grow, and the nation must remove all the obstacles to ease of doing business and all the challenges affecting productivity and investment.
“The focus on policy should be on improving productivity, growing investment, increasing export and improving the regulatory environment and the level of infrastructure, which are the things that need to be done to bring Nigeria back to being Africa’s largest economy,” he stated.
Meanwhile, CFG Advisory argued in its report published earlier in the year that the government must reduce its debt burden, restore its credit rating to investment grade, and tame inflation to get the economy back on track.
Read also: Real estate and urban development: Catalysts for Africa’s GDP growth
“This would reduce borrowing costs and provide a stimulus for investment, sustainable growth, productivity, and employment,” it said, stating that to accomplish this, the government must restructure its capital structure and balance sheet.
“Selling down its JV oil assets will raise $30-50 billion, which can be applied to reduce the debt burden, improve the foreign exchange regime, provide dollar supply for naira appreciation, restore credit rating and boost net reserves.”
