Nigeria's Economy Forecast to Bounce Back to $552 Billion by 2031, According to Projections
Nigeria, once Africa's largest economy, is currently facing economic headwinds that have caused its GDP to decline since President Bola Tinubu took office in 2023. This decline has resulted in the country dropping to third place behind Egypt and South Africa.
According to the International Monetary Fund (IMF), the GDP projections for African nations in 2031 are based on growth estimates provided at the country level. As of now, the report predicts that Egypt will be the largest economy in Africa in 2031, with a GDP of $612 billion, followed by Nigeria with a projected GDP of $590 billion.
The devaluation of the Nigerian Naira is a significant factor in Nigeria's economic decline. This devaluation, along with the devaluation of the Egyptian Pound, is expected to continue, potentially allowing South Africa to become Africa's largest economy by 2024.
In 2013, Nigeria became Africa's largest economy after the economy was rebased. However, since then, the country has faced two recessions, a decline in oil production, and increased vulnerability to global economic shocks. As a result, Nigeria's GDP, which was reported at $362 billion as of 2023, is slightly below the 2010 figure of $366 billion, according to the World Bank.
Despite these challenges, President Tinubu has set ambitious goals for Nigeria's economic growth. During the 2023 NESG summit, he stated his intentions to achieve a $1 trillion economy for Nigeria by 2026 and a $3 trillion economy by the end of the decade.
To achieve this goal, key factors such as population growth, diversification away from oil dependence, infrastructure improvement, political stability, investment in technology and education, and rapid growth driven by manufacturing, services, and a young workforce will be crucial.
However, achieving a $3 trillion economy by the end of the decade would require Nigeria to achieve double-digit economic growth in the coming years, a feat that has not been seen in Nigeria for quite some time.
Experts have called for another rebasing exercise in Nigeria, following the economy's rebasement in 2013. This rebasing exercise could potentially provide a more accurate valuation of Nigeria's economy, with Mr. Bolaji Balogun, CEO of Chapel Hill Denham, suggesting that Nigeria's economy is more accurately valued around $600 billion.
Despite the current economic challenges, Nigeria emerged largely unscathed from the global financial crisis of 2008. With President Tinubu's ambitious goals and the right strategies in place, Nigeria still has a chance to regain its position as Africa's largest economy.
The IMF projects that Nigeria's GDP will decrease from $477 billion in 2022 to $253 billion in 2024. However, if Nigeria can successfully navigate these economic challenges and achieve President Tinubu's goals, it could become the continent's dominant economic power with rapid growth driven by manufacturing, services, and a young workforce.
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