Nigeria's Economic Growth Projected to Reach $552 Billion by 2031, According to Forecasts
Nigeria, once Africa's largest economy after a rebase in 2013, is facing economic challenges that have resulted in a decline in its GDP and the loss of its top position on the continent.
From 2004 to 2013, Nigeria experienced an impressive average annual GDP growth of 6.8%, as reported by the International Monetary Fund (IMF). However, since President Bola Tinubu took office in 2023, the country has faced a series of economic setbacks.
The devaluation of the Nigerian Naira has played a significant role in Nigeria's decline. This devaluation, coupled with two recessions, a decline in oil production, and increased vulnerability to global economic shocks from 2014 to 2024, has caused Nigeria's GDP to drop.
According to IMF estimates, Nigeria's GDP in US dollars fell from $477 billion in 2022 to $375 billion in 2023 and is projected to decrease further to $253 billion in 2024. As a result, Nigeria has dropped to third place in Africa, behind Egypt with a GDP of $394 billion and South Africa with $378 billion.
Despite these challenges, the IMF projects that Nigeria's economy is expected to expand by 3.3% in the coming year. The IMF also estimates that Nigeria's economy will reach approximately $566 billion in 2024.
Mr. Bolaji Balogun, CEO of Chapel Hill Denham, has suggested that Nigeria's economy is more accurately valued around $600 billion, taking into account factors like population growth and the expanding informal sector. Researchers used the Global Trade Analysis Project (GTAP) Adjust software tool, created by the Center for Policy Studies, to incorporate these projected GDP figures into their database.
However, these projections may not be enough to regain Nigeria's position as Africa's largest economy. Egypt is projected to be the largest economy in Africa in 2031, with a GDP of $612 billion. South Africa's potential growth could also cause it to overtake Egypt and become Africa's largest economy by 2024, depending on the continued devaluation of the Egyptian Pound.
President Tinubu's goals, set during the 2023 NESG summit, include achieving a $1 trillion economy by 2026 and growing to $3 trillion by the end of the decade. Achieving such growth would require Nigeria to overcome its current economic challenges and achieve double-digit economic growth in the coming years.
As of 2023, Nigeria's GDP was reported at $362 billion, slightly below the 2010 figure of $366 billion, according to the World Bank. The GDP projections for African nations in 2031 are based on growth estimates provided by the International Monetary Fund at the country level.
In conclusion, Nigeria's economy is facing significant challenges that have resulted in a decline in its GDP and the loss of its position as Africa's largest economy. However, with President Tinubu's ambitious goals and the potential growth in the informal sector, there is hope for Nigeria to regain its economic prowess in the future.
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