Sopuruchi Onwuka

Nigeria’s nominal gross domestic product (GDP) fell sharply by 93 percent, from $363 billion in 2023 to $188 billion in 2024, highlighting the immediate effects of economic policies introduced by President Bola Tinubu’s administration after taking office last year.

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According to independent data obtained by Oracle Intelligence, the early fiscal and monetary measures implemented under the administration have also deepened poverty levels, with Nigeria’s per capita income now at $824; far below the global average of $10,589.

The country’s real GDP growth also stagnated just 2.1 percent over the last decade, stressing the sluggish pace of economic expansion under successive All Progressives Congress (APC)-led governments.

Despite being Africa’s largest economy, with GDP previously exceeding $500 billion, Nigeria continues to struggle with structural weaknesses, including high inflation, limited infrastructure, and declining foreign investment. Growth in recent years has barely kept pace with population expansion, one of the fastest globally.

The economy remains heavily reliant on oil, which accounts for over 90 percent of export earnings and a large share of government revenue. Fluctuating global oil prices, production disruptions, and security challenges in the Niger Delta have fueled volatility. Efforts to diversify into agriculture, manufacturing, and technology have yet to deliver significant results due to poor infrastructure and low capital investment.

Persistent double-digit inflation has eroded consumer purchasing power, while foreign exchange shortages and the unification of multiple exchange rates have triggered steep depreciation of the naira. The resulting currency instability has further strained businesses and households.

Nigeria’s investment environment remains constrained by insecurity, corruption, and weak governance. Insurgency in the northeast, banditry in the northwest, and separatist tensions in the southeast continue to dampen investor confidence. Chronic power shortages and poor transport networks have also weighed on industrial productivity.

Economists warn that, without structural reforms to stabilize the naira, improve electricity supply, and attract investment, Nigeria risks losing ground in Africa’s economic race. However, the non-oil sector — particularly fintech and digital services — remains a potential driver of medium-term growth.

In a related development, the Central Bank of Nigeria (CBN) reduced its benchmark monetary policy rate (MPR) by 50 basis points to 27.00 percent at its September 23 meeting — the first cut in five years.

The move, smaller than markets anticipated, followed five consecutive months of easing inflation and a modest strengthening of the naira, supported by rising capital inflows and a current account surplus. The CBN said it aims to balance economic recovery with its commitment to price stability, signaling a cautious approach to further monetary easing.