Economic and Political Overview

flag Nigeria Nigeria: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

Africa’s leading economy, Nigeria - in close competition with South Africa - has a population of more than 230.8 million people (CIA). Worldwide, it is the 39th-largest economy by GDP volume. However, Nigeria's economy is highly dependent on oil and is therefore very vulnerable to fluctuations in crude oil prices and production. If over the past decade economic growth reached 2.5% on average, the Covid-19 pandemic and the fall in oil prices caused the economy to contract in 2020. Nevertheless, economic growth rebounded in 2021 (+3.3%) and 2022 (+2.9%) supported by a buoyant services sector and increased revenues from oil and gas exports. According to the IMF, GDP growth reached 2.8% in 2023, slightly below population growth dynamics. Improved oil production and anticipated better harvest in the second half of the year are positive indicators for 2024 GDP growth, projected at 3.2%. However, challenges such as high inflation, naira weakness, and policy tightening are expected to pose obstacles.

The new government assumed office amid a challenging economic landscape characterized by sluggish growth, low revenue collection, escalating inflation, and persistent external imbalances accumulated over years. Encouragingly, recent enhancements in revenue collection and oil production have been observed. However, Nigeria's limited revenue mobilization continues to hinder the government's capacity to address shocks effectively and foster sustainable long-term development. Non-oil revenue collection saw a modest improvement of 0.8 percent of GDP in 2023, partly attributed to the depreciation of the naira. Fitch forecasted that the budget deficit narrowed by 0.2pp in 2023, reaching 5.2% of GDP, as robust non-oil revenue growth and the removal of fuel subsidies were counteracted by elevated capital spending and lower-than-expected oil profits from the Nigerian National Petroleum Corporation Limited. A 1.1% pp increase in government revenue was projected for 2023-2025, totaling 8.5% of GDP, supported by heightened government initiatives to boost non-oil tax revenue. This supported the forecast for the budget deficit/GDP to contract to 5.0% and 4.6% in 2024 and 2025, respectively. The debt-to-GDP ratio was estimated at 38.8% in 2023 by the IMF, with a relatively stable outlook over the forecast horizon. Nigeria's public debt (excluding CBN loans) maintained a relatively long average maturity of 9.7 years. The securitization of NGN23 trillion of CBN loans at a reduced interest rate of 9% contributed to managing general government interest expenses. However, with interest expenditure reaching nearly 42% of revenues, the overall interest burden remains elevated (Fitch Ratings). Nigeria's inherently high inflation surged further, averaging 25.5% year-on-year in the third quarter of 2023, up from 20.3% in the corresponding period of 2022. This increase was partly attributed to the removal of fuel subsidies and naira devaluation. Fitch anticipates inflation to ease to 21.1% in 2024 from an average of 24.8% in 2023, supported by reduced deficit monetization. Overall, fiscal consolidation, economic diversification, inclusive growth and security issues are the main priorities. The main obstacles to development in Nigeria are the inappropriate energy supply, deficient transport infrastructures, inefficient judiciary system, widespread corruption, together with high inflation. The gap between the official value of the naira and its value on the black market is substantial and the banking system is fragilized by the deteriorating quality of assets.

Despite the country's dynamism, the real challenge for Nigeria is the risk of a demographic explosion: according to the United Nations, the population of Nigeria could reach 730 million inhabitants in 2100. Concerns regarding this potential boom are exacerbated by the fact that half of the inhabitants live below the poverty line; pandemics are rampant (HIV, tuberculosis), infant mortality is high and the country struggles with significant levels of inequalities. According to the Nigerian Bureau of Statistics, unemployment stood at 5% in 2023; however, a high proportion of the active workforce is under-employed or employed in the informal sector. The overall GDP per capita was estimated at USD 5,884 in 2022 by the World Bank, but about 8% of Nigerians are deemed food insecure (IMF).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 477.38374.95252.74251.20254.83
GDP (Constant Prices, Annual % Change) 3.32.93.33.03.0
GDP per Capita (USD) 2,2021,6881,1101,0771,066
General Government Gross Debt (in % of GDP) 39.446.346.646.846.6
Inflation Rate (%) 18.824.726.323.016.0
Unemployment Rate (% of the Labour Force) 0.00.00.00.00.0
Current Account (billions USD) 1.021.211.43-0.15-0.35
Current Account (in % of GDP) 0.20.30.6-0.1-0.1

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

The Nigerian economy is dominated by crude oil, which accounts for half of the government revenue and more than 75% of the country's total export earnings (Coface). Nigeria is among the first ten oil exporters, and its oil reserves are estimated at 37 billion barrels (OPEC). The country also has become one of the lead exporters of liquefied natural gas, which accounts for an additional 13% of exports (ITC). The country also extracts tin ore and coal for domestic use. Other natural resources include iron ore, limestone, niobium, lead, zinc and arable land.
Another key sector of the Nigerian economy is agriculture, which employs 38% of the workforce and contributes to about 23.7% of the GDP (World Bank). Crop production in Nigeria is dominated by food crops such as cassava, yams, maize, rice, sorghum, and millet, which are mainly grown by small-scale farmers. Other important crops grown in the country include cocoa, palm oil, rubber, groundnut, and cotton. Nigeria is the world's largest producer of cassava and the third-largest producer of tomatoes and groundnuts. The livestock sub-sector in Nigeria includes the production of cattle, sheep, goats, pigs, and poultry. The sector is also characterized by small-scale farmers, and the production is mainly for subsistence and commercial purposes. Nigerian agriculture is mainly centred on subsistence farming. According to the National Bureau of Statistics (NBS), the agricultural sector grew by 1.13% in 2023 in real terms compared to the 1.88% growth rate recorded in 2022.

The industrial sector makes up 30.8% of the GDP and employs 15% of the workforce. The largest subsector in the country is the petroleum industry, which currently suffers from oil theft that is believed to cost the country potential revenues valued as much as USD 11 billion. Significant oil losses are also recorded due to oil spills. The total annual contribution of oil to aggregate GDP as of Q3/2023 2022 was 5.48% (data NBS). The manufacturing sub-sector is the largest component of Nigeria's industrial sector and includes the production of textiles, food and beverages, chemicals, cement, paper, and automobiles. However, the sector has been facing challenges such as inadequate infrastructure, high production costs, and limited access to finance and raw materials. Overall, the manufacturing sector is estimated to account for 14% of GDP (World Bank). The construction industry in Nigeria is also a significant contributor to the industrial sector, driven by the demand for new infrastructure, housing, and commercial buildings. The sector has been growing rapidly in recent years, and the government has been investing in infrastructure projects such as roads, airports, and railways to support its development.

Services represent 44% of the GDP and employ 47% of the population. Financial sectors, telecommunications and retail especially, are very dynamic. The finance sub-sector is a significant component of Nigeria's services sector, driven by the growth of the banking industry, insurance, and capital markets. Nigeria's banking industry is one of the largest and most sophisticated in Africa, with local and international banks operating in the country. Tourism is also a significant sector, but it struggles due to the country's poor power supply, insufficient road infrastructure, and poor water quality. To address the challenges facing the services sector, the Nigerian government has implemented various policies and initiatives such as the National Digital Economy Policy and Strategy, the Nigerian Tourism Development Master Plan, and the Nigerian Postal Service Reform. These initiatives aim to promote digitalization, improve infrastructure, increase productivity, and create employment opportunities.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 35.2 12.7 52.1
Value Added (in % of GDP) 23.7 30.8 44.0
Value Added (Annual % Change) 1.9 -4.6 6.7

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Nigerian Naira (NGN) - Average Annual Exchange Rate For 1 MUR 7.138.859.029.159.07

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
58,7/100
World Rank:
105
Regional Rank:
13

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
3.86/10
World Rank:
78/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Nigeria is relatively open to trade, which accounts for 26% of its GDP (World Bank, latest data available). The objective of Nigeria's trade policy is to promote and diversify its exports by reinforcing national competitiveness and encouraging liberalization through the reduction of subsidies. The country mainly exports petroleum oils and petroleum gas (mineral products account for 90% of total exports), and boats (3.4%); while imports are led by mineral products (40%), machinery (16.9%), chemical products (8.6%), and vehicles (6.5% - data National Bureau of Statistics 2022).

Nigeria's main export partners are India (12.6% of total exports), Spain (12%), the Netherlands (9.6%), the U.S. (6.8%), and France (5.8%). Its main suppliers are China (22.7% of total imports), the Netherlands (10.4%), India (7.9%), the United States (5.6%), and France (2.6% - data NBS 2022). Nigeria is a member of the World Trade Organization (WTO) and has signed several regional and bilateral trade agreements. The country is a member of the Economic Community of West African States (ECOWAS) and has signed the African Continental Free Trade Area (AfCFTA) agreement, which aims to create a single market for goods and services among African countries. The Nigerian government has implemented various measures to promote exports, such as the Export Expansion Grant (EEG) and the Nigerian Export Supervision Scheme (NESS). These measures aim to encourage non-oil exports, promote value addition, and increase competitiveness. Lingering barriers to trade and investment persist in the country, mainly due to long bureaucratic delays.

Nigeria’s trade balance is structurally positive, but it occasionally turns negative when oil prices and production drop. According to WTO data, in 2022, exports of goods amounted to USD 63 billion, whereas imports reached USD 60.3 billion (+34.5% and +16.3% y-o-y, respectively - WTO). Exports of services stood at USD 4.8 billion, while imports totaled USD 18.8 billion (WTO). According to preliminary figures from CBS, in 2023, total trade amounted to NGN 71,880.01 billion, with imports totaling N35,917.62 billion and exports reaching NGN 35,962.39 billion (+34.2% and +40.3% y-o-y, respectively).

 
Foreign Trade Indicators 20192020202120222023
Imports of Goods (million USD) 55,25735,74051,88060,35145,946
Exports of Goods (million USD) 62,53135,63446,87163,07557,890
Imports of Services (million USD) 38,71019,83316,05718,8200
Exports of Services (million USD) 4,9493,9933,9964,8640
Imports of Goods and Services (Annual % Change) 27.3-61.944.4n/an/a
Exports of Goods and Services (Annual % Change) 15.0-33.4-32.1n/an/a
Imports of Goods and Services (in % of GDP) 19.88.211.8n/an/a
Exports of Goods and Services (in % of GDP) 14.28.110.7n/an/a
Trade Balance (million USD) 2,868-16,402-4,5625,998n/a
Trade Balance (Including Service) (million USD) -30,893-32,241-16,622-7,958n/a
Foreign Trade (in % of GDP) 34.016.422.6n/an/a

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2023
Netherlands 12.6%
Spain 9.4%
India 8.4%
United States 7.5%
Indonesia 6.5%
See More Countries 55.7%
Main Suppliers
(% of Imports)
2023
China 18.4%
Singapore 14.3%
Belgium 9.4%
India 8.0%
United States 6.2%
See More Countries 43.6%

Source: Comtrade, Latest Available Data

 
 

Main Products

63.4 bn USD of products exported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 78.7%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 11.7%
Mineral or chemical nitrogenous fertilisers (excl....Mineral or chemical nitrogenous fertilisers (excl. those in pellet or similar forms, or in packages with a gross weight of <= 10 kg) 3.0%
Light-vessels, fire-floats, dredgers, floating...Light-vessels, fire-floats, dredgers, floating cranes, and other vessels the navigability of which is subsidiary to their main function; floating docks, floating or submersible drilling or production platforms (excl. fishing vessels and warships) 1.0%
Cocoa beans, whole or broken, raw or roastedCocoa beans, whole or broken, raw or roasted 0.9%
See More Products 4.7%
60.7 bn USD of products imported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 38.9%
Wheat and meslinWheat and meslin 3.7%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.3%
Taps, cocks, valves and similar appliances for...Taps, cocks, valves and similar appliances for pipes, boiler shells, tanks, vats or the like, incl. pressure-reducing valves and thermostatically controlled valves; parts thereof 1.6%
Cane or beet sugar and chemically pure sucrose, in...Cane or beet sugar and chemically pure sucrose, in solid form 1.4%
See More Products 52.0%

Source: Comtrade, Latest Available Data

 
 

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Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Ministry of Finance
Ministry of Industry, Trade & Investment
Statistical Office
National Bureau of Statistics
Central Bank
Central Bank
Stock Exchange
Nigerian Stock Exchange
Search Engines
Naijoo
Economic Portals
Proshare Nigeria
Nigeria Galleria

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Political Outline

Current Political Leaders
President and Head of Government: Bola Ahmed Adekunle TINUBU (since 29 May 2023)
Vice President:
Kashim SHETTIMA (since 29 May 2023)
Next Election Dates
Presidential election: February 2027
Parliamentary election: February 2027
Main Political Parties
Nigeria's main political parties include:

- All Progressives Congress (APC): socialist; in the 2023 general election, its candidate Bola Tinubu won the presidential election
- People's Democratic Party (PDP): centre-right, typically attracts national support holding more than half of parliamentary seats
- Labour Party (LP): centre-left
- New Nigeria People's Party: populist
- All Progressives Grand Alliance (APGA): progressive
- Social Democratic Party (SDP): centre-left, moderate
- African Democratic Congress (ADC): centre-left
- Young Progressive Party (YPP): social democracy.

Type of State
Federal presidential republic.
Executive Power
The President of the Republic is both the Head of State and Head of Government. The President is elected by popular vote for a four-year term, renewable once.
The president directs the executive branch of the federal government and is the commander-in-chief of the Nigerian armed forces.
Legislative Power
The two-chamber National Assembly consists of the Senate (109 seats: three per state plus one for the capital Abuja), whose members are elected by popular vote for a four-year term, and the House of Representatives (up to 360 seats), whose members are also elected by popular vote for a four-year term. Each federal state has its own legislative body and a governor elected for four years by vote. The laws vary significantly among the states, particularly due to the application of Sharia law in some of them.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
120/180
Evolution:
115/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
4/7
Civil Liberties:
25/60

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Nigeria, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: May 2024