Economic Analysis


Population 211.4 million
GDP per capita 2,089 US$
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major macro economic indicators

  2020 2021 2022 (e) 2023 (f)
GDP growth (%) -1.8 3.6 3.3 3.0
Inflation (yearly average, %) 13.2 17.0 18.8 20.1
Budget balance (% GDP) -5.6 -6.0 -5.5 -4.5
Current account balance (% GDP) -4.0 -0.4 1.0 1.3
Public debt (% GDP) 34.5 36.6 37.5 39.0

(e): estimate (f): forecast *including state, local authority and public enterprise debt, borrowing from central bank, and arrears


  • Largest African economy and population
  • Significant hydrocarbon resources (world’s 10th-largest proven oil reserves, 9th for gas)
  • Large agricultural potential (world’s 5th-largest producer of cocoa) and mining (gold, barite, tin, zinc)
  • Rapid development of fintech and film industry
  • Low external public debt relative to GDP


  • Debt service exceeds meagre tax revenue (8% of GDP)
  • Dependence on oil (90% of exports, 50% of tax revenue)
  • Oil production subject to theft and sabotage
  • Inadequate oil refining and gas transportation
  • Reduced manufacturing activity (10% of GDP)
  • Deficient electricity and transport infrastructure weighing on agriculture
  • Unemployment, poverty, insecurity, corruption


Despite the boom in non-hydrocarbon sectors, economic growth will still depend largely on the oil sector’s performance

After continuing to benefit from high oil prices in 2022, Nigeria's economic activity will slow slightly in 2023. Despite the country's dependence on oil and gas, the other sectors will also participate in growth, supported by the robustness of transport (2% of GDP) and the rapid expansion of the digital economy (15% of GDP). The new Lekki deepwater port, inaugurated in January 2023 and located 150 kilometres from Lagos, is one of the largest ports in West Africa and will provide strong support to Nigerian trade. In addition, the information technology (Fin Tech) and entertainment sectors (music, cinema, etc.), which are in full expansion mode due to the development of numerous start-ups, will benefit from the Nigeria Start up Act. Promulgated by the government in October 2022, the legislation provides for tax breaks and an innovation fund. Agriculture (25% of GDP) and manufacturing (18% of GDP) will suffer the consequences of the deadly floods of October 2022. The destruction of crops and certain infrastructures (roads, bridges, etc.) will disrupt activity when the agricultural sector provides 50% of jobs and supports over 50% of the population. Moreover, Nigerian economic growth will continue to be largely driven by the oil sector. Its real weight in the economy largely exceeds its strict contribution to GDP (9%) as far as neither the theft of hydrocarbons nor their clandestine extraction nor its repercussions on the economy as a whole is taken into account. Despite the delay in the start-up of the new Dangote mega-refinery - which is supposed to boost crude oil production (with a processing capacity of 650,000 b/d) and reduce imports of refined products - and the slight fall in world oil prices, trade will contribute positively to growth. Indeed, the significant devaluation of the naira (66% between 9 and 19 June 2023, reaching the level of the parallel market, but with sharp fluctuations), following the unification of foreign exchange windows within the Investors and Exporters (I&E) window and the adoption of a floating exchange rate by the Central Bank of Nigeria (CBN), in accordance with the new President's programme, will weigh on import demand.. Similarly, the other components of GDP will suffer from a weakened domestic economic environment. Public investment will be restricted by the government's limited fiscal space. Moreover, while the credit activity of Nigerian commercial banks will be resilient, private investment will wane, given the rise in interest rates, the Central Bank of Nigeria’s (CBN) decision to put a halt to its subsidised credit programme for SMEs and growing insecurity in the country. Last, household consumption (65% of GDP) will stagnate, held back by a durably high unemployment rate (33% of the population) and inflation. With food accounting for 50% of the population's average consumption basket, restrictions on imports to encourage local production, combined with the destruction of crops by recent floods, and insecurity in production and transport, pushed up food inflation to 24.45% in March 2023, forcing the CBN to raise its key rate by 550 basis points since May 2022, to 18.5% in May 2023. The rise in interest rates will not be enough to reduce inflation, which will continue to rise, while the devaluation of the naira and the end of fuel subsidies will significantly increase the price of petrol, transport and imported foodstuffs.


Exchange rate liberalisation should be favourable to external and public accounts

Although improving, public finances will remain in deficit in 2023, due to persistently high levels of current expenditure and the structurally weak mobilisation of tax revenues. The abolition of the fuel subsidy and the increase in revenue from hydrocarbons (50% of public revenue) will outweigh the increase in interest on the external debt, both of which were caused by the devaluation. In addition, the exploitation of a new field, the restarting of two oil pipelines made possible by the reduction in criminal attacks and the planned construction of LNG terminals will also have a positive impact. The government is still struggling to increase public revenue from non-oil activities (5% of GDP) - despite the fact that the underground economy accounts for around 60%, encouraging tax evasion, and that exemptions are legion and rates low. Expenditure is largely accounted for by debt servicing, with interest payments absorbing 48% of consolidated public revenues and almost 100% of federal government revenues, with the bulk of the debt at the latter level. In a context of restricted access to international capital markets, the government will continue to rely on the CBN, whose past advances have been reclassified as 40-year loans at a rate of 9%. While the proportion of foreign currency debt has been relatively low until now (70% domestic and in naira), dollar-denominated debt will increase significantly as a result of exchange rate liberalisation.


In 2022, the increase in oil revenues (90% of exports) enabled Nigeria to return to a slight current account surplus, and this should continue in 2023. In fact, the trade surplus (1.2% of GDP) could grow, as the fall in domestic demand, the rise in the cost of imported goods following the devaluation, and the start-up of the Dangote mega-refinery, which is supposed to reduce fuel imports (15% of total imports), more than offset the negative impact of the fall in oil prices. However, despite the drop in international transport costs, the structural deficit in the services balance (3.1% of GDP) will continue due to the increase in oil and gas trade. The primary income deficit (2.6% of GDP) will remain, fuelled in particular by the increase in interest on foreign debt. The secondary revenue surplus (4.7% of GDP) will increase, driven by remittances from expatriate workers, which will be converted at the market rate. Finally, the adoption of a floating exchange rate will attract foreign currency, especially in the form of portfolio investments.


The peaceful arrival of a new president amidst security challenges

The Nigerian presidential election of 1 March 2023 saw the victory of Bola Tinubu (70 years old, a Muslim from the Yoruba ethnic group, which is mostly Christian, from the south of the country), the candidate of the ruling party, the All Progressives Congress (APC). Securing 36.6% of the vote, he led his main opponents, his long-time opponent Atiku Abubakar (Peoples Democratic Party) and the new force Peter Obi (Labour Party), who received 29.1% and 25.4% of the votes, respectively. With at least 25 per cent of the votes cast in one-third of the states, Tinubu has exceeded the threshold required to avoid a second round. While the main opposition parties commonly contest the results, citing technical problems, delays in sorting the results or acts of intimidation and violence that compromised the votes, the Independent National Electoral Commission (INEC) once again rejected the various complaints and President Tinubu was sworn in on 29 May. In the federal parliamentary elections held on the same day, the presidential party APC won 159 of the 360 seats in the House of Representatives and 59 of the 109 seats in the Senate. The APC also won the 18 March, 2023 gubernatorial elections, winning 19 governorships, compared to 12 for the PDP. Nigeria's deteriorating domestic environment, particularly the chronic insecurity in many parts of the country, poverty, unemployment and high commodity prices, will make it difficult to implement the unpopular economic and social reforms needed to improve the country's economic fundamentals. The announcement of the end to fuel subsidies angered the unions, who immediately called an indefinite general strike. The risk of the government backtracking cannot be ruled out if the popular protest movement gains momentum.


Last updated: July 2023

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