The Nigerian Economy: A Look at the Numbers

Nigeria has the 30th largest economy in the world.
It grew by 3.25% in 2023.

What do the Statistics Say About the Nigerian Economy?

According to Nigeria’s National Bureau of Statistics, the Nigerian economy had a 2.54% quarter-on-quarter economic growth in 2023, which resulted in a 3.46% overall expansion in 2023 GDP. The growth was largely the result of the oil sector ending a period of three years of contraction.

The Nigerian Government has explained that the country’s oil sector expanded by 12.1%, or 1.55 million barrels per day. Previously, this number was 1.34 million barrels per day. Nigeria is aiming to grow this number to 2.6 million by 2026. Oil prices have stabilised, which was a significant contributing factor in the steady growth of the Nigerian economy.

President Bola Tinubu explained that thanks to reforms, Nigeria has “attracted foreign direct investments worth more than $30 billion in the last year.” Doris Uzoka-Anite, Minister of Industry, Trade and Investment, stated that both foreign and domestic investors will invest the money. Uzoka-Anite explained that “the investors are going to bring in the money or a promise to bring in the investment”. She added that “some of the monies will come in the form of equipment, direct investments into manufacturing, and into the facilities. So that fund is here already”.

Investments in the Nigerian Economy

A new bilateral agreement with India has largely helped attract the aforementioned investments. This agreement will see $14 billion dollars of Foreign Direct Investment (FDI) alone. Uzoka-Anite confirmed that $10 billion in investment commitments for the oil and gas sector had been secured. Such large investments in a range of sectors and industries have already led to growth both in terms of overall GDP, and most likely job opportunities for Nigerians well into the future.

Nigeria have also interacted with representatives from other countries. These include Germany, the Netherlands, the UAE and South Africa, with potential for further investments and agreements. Nigeria was able to sign a trade agreement with Germany, for example, a year ago in 2023. This deal involved the export of 850 thousand tons of liquid gas each year. The first export is expected in 2026, with the possibility of increased gas exports in the future. This was just two weeks after agreeing a deal with Saudi Arabia to revive nonfunctional refineries.

Investments are also flowing from inside Nigeria. The Nigerian Bottling Company, for example, have invested $1.3 billion in the last decade. They plan to invest a further $1 billion in the next five years alone.

Were the Predictions of the 2024 Nigerian Economy correct?

PwC Nigeria, a leading professional services firm, predicted that seven key trends would shape Nigeria’s economic growth in 2024. The firm predicted a small decline in inflation, and an overall rise of 3.1% GDP growth. They added that balancing their fiscal reforms with “effective budget implementation” would be crucial.

PwC expected sectoral growth in particular, explaining “the main drivers of GDP growth in the last 12 months have been the financial services, information and communication, and utilities sectors. The firm expects these sectors to continue to drive growth in the short term.“

Other sectors needed to grow as well, and in some cases, there were extenuating circumstances out of Nigeria’s control. Oil revenue was significantly influenced by OPEC production quotas, for example. Additionally international oil prices and increasingly unstable geopolitical realities have also effected growth. Nonetheless, the Nigerian economy has grown somewhat in 2024. At the time of publication – early November, Nigeria’s Real GDP Growth was at 2.9% according to the IMF.

Unfortunately, there are uncertainties in the Nigerian market. FTSEL Russel recently reclassified Nigeria from Frontier to Unclassified Market Status, due to delays in capital repatriation. Whilst FDI flows are still expected to improve from last year, optimism should be cautious. The World Bank explained that in 2023, the poverty rate was an estimated 38.9%. This rate has increased in 2024, to 40.7%. Wages are not keeping up with inflation rates, which is hurting the Nigerian population. Purchasing power is still a significant issue, despite the lower unemployment rate.

Plans to Re-energise the Economy

President Tinubu plans on creating millions of jobs. According to arise.tv, he plans to unlock “the value of Nigeria’s vast public assets with a view to optimising and doubling the country’s Gross Domestic Product”. He aims to raise in excess of $10 billion “to increase foreign exchange liquidity that will, in turn, stabilise the Naira.” Tinubu’s Vice President Shettima explained the plan: “at the core of this is ensuring optimal management of the assets and investments of the Federal Government towards unlocking their revenue potential”. Shettima added that the government has a long-term plan “to double the GDP growth rate and significantly increase the GDP base over the next eight years.”

President Tinubu has stated that transparency and accountability are non-negotiables after a long period of hindered economic growth. He explained that attracting new investment capital will increase returns, which can then be directed towards “crucial funding for education, healthcare, housing, power, roads and other areas vital to lifting millions out of poverty”. Sustainable economic development becomes manageable should this be achieved. as well as job creation for Nigerian youth.

Conclusion

There is hope for in the long-term for the Nigerian GDP. Statista is currently predicting a yearly growth rate of just over 3% each year through to 2028. With strategic, adaptable planning going into the future, the Nigerian economy should steadily grow.

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