Nigeria’s economy faces a significant downturn, with GDP per capita falling by 72.35% from 2014 to 2024. The overall GDP dropped sharply, reflecting a contraction in economic output. Inflation surged to 34.8%, fuel prices skyrocketed due to subsidy removal, and the naira has drastically devalued against the dollar. Despite claims of progress, key economic indicators suggest persistent decline, leading to calls for urgent reforms.
Nigeria, Africa’s largest oil producer and home to over 200 million people, is grappling with a severe economic downturn, as indicated by a 72.35% drop in its GDP per capita. According to the International Monetary Fund (IMF), the GDP per capita fell from $3,022 in 2014 to just $835.49 in 2024, reflecting a significant decrease in the average economic output per person.
The country’s total Gross Domestic Product (GDP) also saw a dramatic decline from $568.5 billion in 2014 to $194.96 billion in 2024, representing a staggering 65.71% decrease. Similarly, real GDP growth, adjusted for inflation, has slowed from 6.3% in 2014 to 2.9% in 2024. Such declines underline the worsening state of Nigeria’s economy over the past decade.
Policy reforms instituted in 2023 by President Bola Tinubu have contributed to the crisis. Notably, the removal of fuel subsidies led to a significant petrol price hike, driving inflation up to 34.8% by December 2024. Compounded by the devaluation of the naira, these measures increased import costs while eroding purchasing power.
Nigeria’s oil production, crucial for foreign exchange earnings, is struggling to meet targets set by the Organisation of Petroleum Exporting Countries (OPEC). While President Tinubu’s government claims economic growth is on the horizon, economists argue that key indicators reflect an ongoing decline. Marcel Okeke, former Chief Economist at Zenith Bank, suggests a reality marked by persistent economic setbacks.
According to Okeke, the inflation rate jumped from 22.4% in May 2023 to 34.8% by December 2024. He also highlighted the naira’s depreciation, noting an exchange rate increase from below N500 to between N1,000 and N1,500 per dollar. Rising fuel prices, especially in the context of increased federal allocations, reinforce the sentiment that the economy is not improving.
Nigeria’s planned rebase of GDP and Consumer Price Index by January 2025, aimed at offering a clearer economic picture, may be misleading without true progress. Okeke warns that tweaks to economic indicators may mask the reality of widespread unemployment and stagnant wages. He asserts that despite rising allocations, living conditions have worsened.
The country’s oil sector, which constitutes over 90% of export value, faces challenges meeting OPEC quotas, undermining governmental revenue. Though OPEC reported an uptick in Nigeria’s oil production to an average of 1.53 million barrels per day, analysts express concern regarding underlying structural issues, such as pipeline vandalism and lack of investment.
According to Aliyu Ilias, a development economist, the naira’s depreciation has significantly contributed to the low GDP per capita. He indicated that Nigeria’s 2025 budget is, in dollar terms, less than the previous year’s, reflecting ongoing financial difficulties. Ilias underscores the urgency of policy changes to reverse GDP decline, highlighting the need for increased production and improved economic stability.
In summary, Nigeria is undergoing a profound economic crisis characterized by dramatic declines in GDP and GDP per capita. The impacts of government policy reforms, exacerbated inflation, and a depreciating currency paint a bleak economic landscape. Despite claims of recovery, critical economic indicators reveal a country struggling to stabilize its economic framework, necessitating urgent interventions to restore growth and improve living conditions for its citizens.
Original Source: punchng.com
