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Nigeria is a multi-ethnic and culturally diverse federation of 36 autonomous states and the Federal Capital Territory. The political landscape is partly dominated by the ruling All Progressives Congress party (APC) which controls the executive arm of government and holds majority seats at both the Senate and House of Representatives in parliament, and majority of the States.  

President Bola Ahmed Tinubu was sworn into office on May 29, 2023, having won the February 2023 Presidential election. Nigeria continues to face many social and economic challenges that include insecurity such as banditry and kidnappings especially in the northwest region, continued insurgency by terrorist groups in the north-east, and separatist agitations in the south-east. President Tinubu has continuously pledged to turn around the economy and ensure security across the country. Civil society, the media and other civil groups have committed to sustain advocacy for reforms and actions towards better economic and social outcomes for citizens. 

Economic Overview

Between 2000 and 2014, Nigeria’s economy experienced broad-based and sustained growth of over 7% annually on average, benefitting from favorable global conditions, and macroeconomic and first-stage structural reforms. From 2015-2022, however, growth rates decreased and GDP per capita flattened, driven by monetary and exchange rate policy distortions, increasing fiscal deficits due to lower oil production and a costly fuel subsidy program, increased trade protectionism, and external shocks such as the COVID-19 pandemic. Weakened economic fundamentals led the country’s inflation to reach a 24-years high of 31.7% in February 2024, which, in combination with sluggish growth, has pushed millions of Nigerians into poverty.

Following a change in administration in May 2023, the country has been pursuing bold reforms to reestablish macroeconomic conditions for stability and growth. The petrol fiscal subsidy was partially eliminated, and FX reforms have led to the unification of FX markets and to a market-reflective exchange rate. To alleviate the inflationary effects of these reforms on the most vulnerable, the government has been implementing temporary cash transfers to reach 15 million households. Efforts are also being made to tighten monetary policy and refocus the Central Bank of Nigeria (CBN) on its core mandate of maintaining price stability.

The continuation of the reform momentum is essential for Nigeria to reap its full benefits. The dissipation of the reforms’ initial shock and the stabilization of macroeconomic conditions will instill a sustained but still slow growth in the non-oil economy, while the oil sector is projected to stabilize. Higher growth rates will require structural reforms. Exchange rate liberalization should contribute to both fiscal and external balances. Inflation is expected to gradually decrease on the back of monetary policy tightening and exchange rate stabilization. As a result, poverty rates are expected to increase in 2024 and 2025 before stabilizing in 2026. Risks to Nigeria’s outlook are substantial, especially if reforms lose momentum or are reversed. Risks include relatively weak monetary policy tightening, failure to address imbalances in petrol pricing and to raise non-oil revenues. Rising insecurity, adverse climate shocks, and popular discontent with inflation would also dent economic recovery.

Development Challenges

Despite having the largest economy and population in Africa, Nigeria offers limited opportunities to most of its citizens. Nigerians born in 2020 are expected to be future workers 36% as productive as they could be if they had full access to education and health, the 7th lowest human capital index in the world. Weak job creation and entrepreneurial prospects stifle the absorption of the 3.5 million Nigerians entering the labor force every year, and many workers choose to emigrate in search of better opportunities. The poverty rate is estimated to have reached 38.9% in 2023, with an estimated 87 million Nigerians living below the poverty line — the world’s second-largest poor population after India.  

Spatial inequality continues to be large, with the best-performing regions of Nigeria comparing favorably to upper middle-income countries, while the worst performing states fare below the average for low-income. In most areas of Nigeria, state capacity is low, service delivery is limited, and insecurity and violence are widespread. Infrastructure gaps constrain access to electricity and hinder the domestic economic integration that would allow the country to leverage its large market size, which is aggravated by trade protectionism. Emerging problems such as the increased severity and frequency of extreme weather events, especially in the northern parts of the country, add to these long-standing development challenges.

Recent reforms offer a launching pad to a new social compact for Nigeria’s development. Strengthening macroeconomic fundamentals will allow structural reforms to be pursued and economic growth to be restored. The current low social and economic equilibrium could be switched to one marked by a better funded and more effective State that provides efficient public services, public goods, and a conducive economic environment for the private sector to flourish and create more quality jobs for Nigerians.

Last Updated: Mar 21, 2024

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Nigeria: Commitments by Fiscal Year (in millions of dollars)*

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Country Office Contacts

Main Office Contact
102 Yakubu Gowon Crescent
Opposite ECOWAS Secretariat
P.O. Box 2826, Garki
Abuja, Nigeria
+234 705-919-8999
For general information and inquiries
Mansir Nasir
Senior External Affairs Officer
For project-related issues and complaints