In 2025, Nigeria experienced a decline in its Gross Domestic Product (GDP) per capita, decreasing to $835.49 from $877.07 in 2024, marking a 4.74% reduction, according to the International Monetary Fund (IMF). This downward trend has been ongoing since 2014, when GDP per capita was at a high of $3,220.
Understanding GDP Per Capita
GDP per capita is a critical economic metric that divides the total value of goods and services produced within a country by its population, providing an average economic output per person. It serves as an indicator of the average standard of living and economic well-being of a nation’s citizens. A declining GDP per capita suggests that economic growth is not keeping pace with population growth, leading to potential decreases in individual prosperity.
Historical Context and Recent Trends
The decline in Nigeria’s GDP per capita has been significant over the past decade. In 2014, the figure stood at approximately $3,220, but recent estimates by the IMF indicate a plunge to $835 in 2025. This dramatic decrease highlights the challenges the Nigerian economy has faced, including policy missteps and external economic pressures.
GDP Rebasing Efforts
In an effort to provide a more accurate representation of the economy, the National Bureau of Statistics (NBS) has undertaken a rebasing of Nigeria’s GDP. This process involves updating the base year for GDP calculations to reflect current economic realities and incorporate emerging sectors. The rebasing is expected to include new sectors such as the digital economy, pension funds, health insurance, modular refineries, and other previously unaccounted activities.
Projected Economic Outlook
Despite the recent decline, the IMF projects a positive trajectory for Nigeria’s GDP per capita in the coming years. The forecast anticipates a rise in 2026 and 2027, with the GDP per capita expected to surpass the $1,000 mark in 2028, reaching $1,040. This optimism is contingent upon sustained economic reforms and stability in key sectors.
Regional Comparisons
Within sub-Saharan Africa, Nigeria’s GDP per capita places it in the $500 to $2,500 range, a band that includes the majority of countries in the region. Some nations fall below this range, while others, like South Africa, have higher GDP per capita figures. This comparison underscores the diverse economic landscapes across the continent.
Business Environment Indicators
Amidst the challenges, there are signs of resilience in Nigeria’s private sector. The latest Purchasing Managers’ Index (PMI) from Stanbic IBTC Bank indicates growing confidence in the business environment, reflected in increased output for the second consecutive month. The report notes that new orders and business activity continued to rise, suggesting improving customer demand and a greater willingness to commit to new projects.
Expert Insights
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, commented on the PMI report, stating, “Nigeria’s private sector activity sustained its improvement in January 2025, albeit lower than levels seen in December 2024. We note an increase in both output and new orders, although slightly weaker than that seen at the end of 2024, on account of improving customer demand and more willingness to commit to new projects.”
Inflation and Economic Growth Projections
The IMF has projected that Nigeria’s real GDP growth will be 3.2% in 2025, while inflation is estimated to drop to 25% in the same year. These projections are based on assumptions of stable crude oil prices, improvements in domestic oil production, and the sustained implementation of government reforms.
Comparative Economic Projections
The Nigerian Economic Summit Group (NESG) has offered a more optimistic outlook, estimating a 5.5% GDP growth in its 2025 Macroeconomic Outlook Report. NESG’s Chief Economist, Olusegun Omisakin, emphasized that achieving this growth rate is contingent upon the continuation of stability-focused reforms and efficient policy implementation. He cautioned that inefficient policy execution and economic constraints could limit growth to 3.4%, while a reversal of reforms could see it drop to 2.7%.
Central Bank’s Perspective
The Governor of the Central Bank of Nigeria, Olayemi Cardoso, projected that the economy will grow by 4.17% in 2025, accompanied by a decline in inflation and increased foreign exchange inflows. He highlighted factors such as sustained government reforms, stable crude oil prices, and enhanced domestic oil production as key drivers of this anticipated growth. Cardoso also noted the expected positive impact of increased refining capacity from the Dangote refinery and the revitalization of the Port Harcourt and Warri refineries.
Conclusion
Nigeria’s recent decline in GDP per capita underscores the challenges facing the nation’s economy. However, ongoing efforts such as GDP rebasing, economic reforms, and positive indicators in the private sector provide a foundation for potential recovery and growth. The projections for the coming years offer a cautiously optimistic outlook, contingent upon effective policy implementation and stability in key economic sectors.
