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

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Africa’s leading economy, Nigeria - in close competition with South Africa - has a population of more than 219 million people (CIA). Worldwide, it is the 25th 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 by -1.8% in 2020 (IMF). Economic growth rebounded to 2.6% in 2021, supported by government policy support, rising oil prices and international financial assistance (IMF). According to IMF estimates, it is projected to reach 2.7% in 2022 and 2023. Economic activity will benefit from higher oil prices and an increase in oil production. Among the downside risks are high inflation, security issues, a potentially sharper-than-expected slowdown in China and a low vaccination rate (Focus Economics).

In 2021, Nigerian economy recovered from the recession caused by the combined impacts of the Covid-19 crisis and the oil price shock. However, despite the recovery in oil prices, the fiscal deficit widened to an estimated -6.3% GDP in 2021, from -5.7% GDP in 2020 due to higher security spending and fuel subsidies (IMF). According to IMF projections, it should further increase to -6.4% GDP in 2022, although the 2022 budget optimistically targets a 3.4% GDP deficit. Euler Hermes and Coface also expect the fiscal deficit to hover around -5.5% GDP in the medium term. Public debt increased from an estimated 35% GDP in 2020 to 35.7% GDP in 2021, and is forecast to further rise to 36.9% GDP in 2022 and 37.7% GDP in 2023 (IMF). Even if public debt remains low, debt accumulation has increased sharply, and interest payments will absorb 40% of the country’s scarce resources (Coface). Inflation reached a peak of 18.2% in March 2021, before declining thanks to new harvest season and opening of land borders (IMF). From an estimated 13.2% in 2020, it rose to 16.9% in 2021, and it is forecast to remain in double-digit territory in 2022 (13.3%) and 2023 (11.8%) (IMF). Fuelled by elevated food prices, high domestic energy prices, accommodative monetary policy and imports restrictions, it has constantly exceeded the central bank’s inflation target range of 6% over the past few years (Euler Hermes). Fiscal consolidation, economic diversification, inclusive growth and security issues are the main priorities. The main obstacles to development in Nigeria are the unappropriate energy supply, deficient transport infrastructures, inefficient judiciary system, widespread corruption, together with high inflation. The gap between the official value of 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. Concern regarding this potential boom is 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 rate soared to 33.3% in Q4 2020 due to the pandemic. Food insecurity and poverty have increased, and purchasing power deteriorated. 

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 429.42e441.54504.20574.27651.34
GDP (Constant Prices, Annual % Change) -1.8e3.63.23.02.9
GDP per Capita (USD) 22222
General Government Gross Debt (in % of GDP) 34.536.637.438.639.8
Inflation Rate (%) 13.217.018.917.312.6
Unemployment Rate (% of the Labour Force) 0.00.00.00.00.0
Current Account (billions USD) -16.98-1.85-0.95-3.73-2.99
Current Account (in % of GDP) -4.0-0.4-0.2-0.7-0.5

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 about 10% of the country's GDP, 50% of government revenue and more than 75% of the country's total export earnings (Coface, ITC). Nigeria is the world’s 8th oil exporter, and its oil reserves are estimated at about 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. Nigeria’s other natural resources include iron ore, limestone, niobium, lead, zinc and arable land. Another key sector of the Nigerian economy is agriculture, which employs 35% of the workforce and contributes for about 24.1% of GDP (World Bank). The Southern and Central regions of the country produce yam, rice, and maize while the Northern regions produce sorghum, millet, rice, and livestock farming. Other major crops include beans, sesame, cashew nuts, cassava, cocoa beans, rubber, soybeans, and bananas. Nigerian agriculture is mainly centered on subsistence farming.

The industrial sector makes up 28.2% of the GDP and employs 12% of the workforce. Its development has been constrained by power shortage. The largest industries in the country are the petroleum industry, tourism, agriculture, and mining. The petroleum industry currently suffers from oil theft, which is believed to cost the country potential revenues valued as much as USD 10.9 billion. Significant oil losses are also recorded due to oil spills.

Services represent 46.4% of the GDP and employs 53% of the population. Financial sectors, telecommunications and retail especially, are very dynamic. Tourism is also a significant sector, but this sector still struggles due to the country's poor power supply, insufficient road infrastructures, and poor water quality. The Covid-19 pandemic had a huge impact on tourism as well as the entertainment industry, but vaccination programmes enabled activity to rebound in 2021.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 35.0 12.0 53.0
Value Added (in % of GDP) 24.1 28.2 46.4
Value Added (Annual % Change) 2.2 -5.8 -2.2

Source: World Bank - Latest available data.

 

Find more information about your business sector on our service Market Reports.

 
 
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.

 
 

Find out all the exchange rates daily on our service Currency Converter.

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 open to trade, which accounted for 25% of Nigeria's GDP in 2020 (World Bank). 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 (75.4% of total exports), petroleum gas (12.9%) and boats (6.2%); and it imports machinery (18.6% of total imports), petroleum oils (15.3%), vehicles (10.1%), electrical machinery (7%), pharmaceutical products (5.4%), plastics (4.5%) and cereals (4.2%) (ITC, 2020).

Nigeria's main export partners are India (15% of total exports), Spain (10.9%), the Netherlands (8.6%), South Africa (7.6%), China (5.1%) and France (4.5%). Its main suppliers are China (28.8% of total imports), the United States (9.1%), India (7.9%), the Netherlands (7.8%), Belgium (3.8%) and Germany (3.1%) (ITC, 2020). Nigeria has signed trade agreements with a number of countries in Africa, the Caribbean, the Pacific, and the European Union. In 2019, Nigeria also signed the African Continental Free Trade Agreement, which is expected to boost the non-oil sector. Raw materials and semi-finished goods benefit from reductions in customs tariffs, even if the country remains protectionist in certain sectors such as agriculture. There are currently more than 40 free trade zones and 8 more are under construction. 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 World Bank data, in 2020 the trade balance registered a deficit of USD -16.4 billion, due to the combined impacts of the Covid-19 crisis and the oil price shock. Exports of goods amounted to USD 35.6 billion, whereas imports reached USD 55.4 billion (WTO). Exports of services amounted to USD 3.5 billion, while imports reached USD 19.6 billion (WTO). Imports of goods and services decreased by -23.3% compared to 2019, while exports decreased by -27% (World Bank). Economic recovery and higher oil revenues resulted in a trade surplus in 2021. As imports are expected to be constrained and oil sales to boom, trade surplus is set to widen in 2022 (Coface).

 
Foreign Trade Indicators 20172018201920202021
Imports of Goods (million USD) 31,27343,00755,25755,39051,941
Exports of Goods (million USD) 44,46860,54762,53135,63446,932
Imports of Services (million USD) 17,97330,62538,45219,59815,165
Exports of Services (million USD) 4,5414,3514,4863,5334,082
Imports of Goods and Services (Annual % Change) 4.849.227.3-23.3n/a
Exports of Goods and Services (Annual % Change) 8.7-1.415.0-27.0n/a
Imports of Goods and Services (in % of GDP) 13.217.519.816.6n/a
Exports of Goods and Services (in % of GDP) 13.215.514.28.8n/a
Trade Balance (million USD) 13,14820,4672,868-16,402n/a
Trade Balance (Including Service) (million USD) -86-5,599-30,893-32,241n/a
Foreign Trade (in % of GDP) 26.333.034.025.4n/a

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

 
 
 

Main Products

n/a bn USD of products exported in 2017
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 0.0%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 0.0%
Cocoa beans, whole or broken, raw or roastedCocoa beans, whole or broken, raw or roasted 0.0%
Oils and other products of the distillation of...Oils and other products of the distillation of high temperature coal tar; similar products in which the weight of the aromatic constituents exceeds that of the non-aromatic constituents 0.0%
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 0.0%
See More Products 100.0%
n/a bn USD of products imported in 2017
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 0.0%
Wheat and meslinWheat and meslin 0.0%
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) 0.0%
Granite, porphyry, basalt, sandstone and other...Granite, porphyry, basalt, sandstone and other monumental or building stone, whether or not roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs of a square or rectangular shape (excl. in the form of granules, chippings or powder, or already with the characteristics of setts, curbstones and flagstones, and monumental or building stone of an apparent specific gravity of >= 2,5) 0.0%
Cane or beet sugar and chemically pure sucrose, in...Cane or beet sugar and chemically pure sucrose, in solid form 0.0%
See More Products 100.0%

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: Muhammadu Buhari (since 29 May 2015) - All Progressives Congress
Vice President Oluyemi "Yemi" OSINBAJO (since 29 May 2015)
Next Election Dates
Presidential election: February 2023
Parliamentary election: February 2023
Main Political Parties
High political instability often results in the postponement of elections. However, the All Progressives Congress (APC) secured a majority in the bicameral House of Representatives in March 2015. With the exception of the People's Democratic Party (PDP), political parties are generally based on tribal or regional identity rather than ideology. In 2013, several popular parties came together to form the All Progressives Congress (APC) party. Main political parties include:
- All Progressives Congress (APC): socialist
- People's Democratic Party (PDP): centre-right, typically attracts national support holding more than half of parliamentary seats
- Labour Party (LP) : centre-left
- All Progressives Grand Alliance (APGA): progressive
- Social Democratic Party (SDP): centre-left, moderate
- Accord Party (ACC): capitalism, populism
- Young Progressive Party (YPP): social democracy
Type of State
Federal Republic Democracy
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.
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 (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 the states.
 

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

COVID-19 epidemic evolution
To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Nigeria, please visit the COVID-19 Nigeria website.

For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Nigeria consult the COVID-19 Nigeria website and Implementation Guidelines for Containment of COVID-19.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports), there is mention of export restrictions of masks in KPMG’s report Government and institution measures in response to COVID-19.

For a general overview of trade restrictions due to COVID-19 pandemic, please consult the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For  information on the economic recovery scheme put in place by the Nigerian government to address the impact of the COVID19 pandemic on the Nigerian economy, refer to the article Deloitte report COVID-19: Economic, tax and other fiscal stimulus measures in Nigeria and KPMG’s report Government and institution measures in response to COVID-19.

For a general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and  macroeconomic) taken by the Nigerian government to limit the socio-economic impact of the COVID-19 pandemic,  please consult the section dedicated to Nigeria in the IMF’s Policy Tracker platform.
Support plan for businesses
For information on the local business support scheme established by the Nigerian government and other organizations to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity refer to the Central Bank of Nigeria’s Guidelines For The Implementation of the n50 Billion Targeted Credit Facility and KPMG’s report COVID-19: The Central Bank of Nigeria (CBN) Support Measures.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.
Support plan for exporters
There are no specific support plans for exporters in the Nigeria so far. For future possible up-to-date information please visit the websites of the Federal Ministry of Trade and Investment (FMITI) and the Nigerian Export Promotion Council.
 

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Latest Update: November 2022