Nigeria's economy projected to soar to a staggering $552 billion by 2031, according to a new forecast
Nigeria, once Africa's largest economy after the rebase of the economy in 2013, is expected to lose this title in 2024, according to the latest International Monetary Fund (IMF) projections.
The decline in Nigeria's GDP has been attributed to several factors, including the devaluation of the Nigerian Naira, economic challenges such as inflation, foreign exchange shortages, and government policy adjustments aimed at stabilizing the economy. These challenges were particularly pronounced during the tenure of President Bola Tinubu, who took office in 2023.
Since Tinubu's inauguration, Nigeria has faced a decline in GDP, with the country's GDP falling from $477 billion in 2022 to $375 billion in 2023 and projected to decrease further to $253 billion in 2024. This downward trend is in stark contrast to the period from 2004 to 2013 when Nigeria enjoyed an average annual GDP growth of 6.8%, as reported by the IMF.
The devaluation of the Naira has been a significant contributor to this decline. In 2023, the Naira was significantly devalued, primarily due to the economic challenges the country faced. This devaluation is expected to continue, impacting the country's economic standing.
On the other hand, Egypt is predicted to become the largest economy in Africa in 2031, with a projected GDP of $612 billion. The report suggests that Egypt will overtake Nigeria due to its resilient economy, despite facing its own economic challenges.
Nigeria is not the only African country experiencing a downturn. From 2014 to 2024, Nigeria faced two recessions, a decline in oil production, and increased vulnerability to global economic shocks. Other African countries have faced similar challenges, leading to a reevaluation of GDP projections for the continent.
The Global Trade Analysis Project (GTAP) Adjust, a software tool created by the Center for Policy Studies, was used to incorporate the projected GDP figures into the researchers' database. This tool has helped in understanding the economic landscape of African countries and predicting future trends.
Despite these challenges, some experts believe that Nigeria's economy is more accurately valued around $600 billion. Mr. Bolaji Balogun, CEO of Chapel Hill Denham, has suggested this valuation, which, if accurate, would place Nigeria ahead of Egypt in terms of GDP.
However, Nigeria is expected to remain behind Egypt as the largest economy, falling short of President Tinubu's goals of achieving a $1 trillion economy by 2026 and growing to $3 trillion by the end of the decade. Achieving a $3 trillion economy would require Nigeria to achieve double-digit economic growth in the coming years, a challenging feat given the current economic climate.
As of 2023, Nigeria's GDP was reported at $362 billion, slightly below the 2010 figure of $366 billion, according to the World Bank. This decline in GDP has resulted in Nigeria dropping to third place in Africa, behind Egypt with a GDP of $394 billion and South Africa with $378 billion.
The devaluation of the Egyptian Pound, along with the Nigerian Naira, is expected to impact the economic standings of both countries by 2024, potentially allowing South Africa to become Africa's largest economy.
Experts have called for another rebasing exercise in Nigeria to accurately reflect the country's economic growth and potential. This exercise could provide a more accurate picture of Nigeria's economic standing and help in setting realistic goals for future economic growth.
Read also:
- Federal petition from CEI seeking federal intervention against state climate disclosure laws, alleging these laws negatively impact interstate commerce and surpass constitutional boundaries.
- Duty on cotton imported into India remains unchanged, as U.S. tariffs escalate to their most severe levels yet
- Steak 'n Shake CEO's supposed poor leadership criticism sparks retaliation from Cracker Barrel, accusing him of self-interest
- Hydrogen Energy: Sustainable Innovation or Resource Exploitation?
