According to a recent report by the International Monetary Fund (IMF), Nigeria’s Gross Domestic Product (GDP) per capita has dropped to $835.49 in 2025, marking a 4.74% decline from the $877.07 recorded in 2024. This drop is part of a sustained downward trend that has persisted in recent years. The data highlights the nation’s economic challenges, even as they project a potential rebound in the coming years. The report further underscores the urgent need for effective policy implementation and Structural Reforms to stabilise the Economy and improve the living standards of Nigerians.
GDP per capita is a key indicator of a country’s economic health use to measure the citizens’ average income and standard of living. The country’s GDP per capita decline reflects broader economic struggles, including slow growth, high inflation, and structural inefficiencies. However, amidst these challenges, there are glimmers of hope. The IMF forecasts a gradual recovery, with GDP per capita expected to rise above the $1,000 mark by 2028, reaching $1,040. This projection, coupled with rising business confidence and increased Private Sector activity, suggests that the region’s economic trend could improve if the right reforms are implemented.
Economic reforms and recalibration efforts by NBS.
Meanwhile, the decline comes at a time when the National Bureau of Statistics (NBS) is rebasing the country’s GDP to include previously unaccounted sectors of the economy. This rebasing effort aims to reflect local economic activities more accurately by incorporating emerging sectors such as the digital economy, Pension funds, modular refineries, and even informal and hidden economic activities. While this recalibration is expected to offer a clearer picture of the nation’s economic system, it also notes the structural gaps that have hindered growth in recent years.
Including these new sectors is a step in the right direction, as it acknowledges the evolving nature of the national economy. However, the success of these efforts will depend on the government’s ability to implement policies that foster growth in these areas. For instance, the digital economy, which has seen notable growth in recent years, could become a major driver of economic activity if supported by adequate Infrastructure and regulatory frameworks. Similarly, formalising informal sectors could unlock new Revenue streams and create employment opportunities.
Business confidence and private sector development.
Despite the decline, positive signs emerge from the nation’s private sector. According to the latest Purchasing Managers’ Index (PMI) released by Stanbic IBTC Bank, business confidence in Nigeria is rising. The report indicates that output increased for the second consecutive month in early 2025, driven by new orders and business activity growth. This uptick in private sector performance suggests that businesses adapt to the challenging economic environment and find ways to thrive. However, this growth must be supported by macroeconomic stability and investor-friendly policies to ensure its continuity.
As a result, the government’s ability to address key challenges such as inflation, exchange rate volatility, and infrastructure deficits will be critical in sustaining this momentum. One of the most pressing challenges facing the region’s economy is high inflation, which stood at 34.80% as of February 2025. The Central Bank of Nigeria (CBN) has responded by maintaining a tight Monetary Policy stance, with the Monetary Policy Rate (MPR) at 27.5%. While these measures are aimed at curbing inflation, they also pose challenges for businesses and consumers, as higher interest rates can stifle borrowing and investment.
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In addition, the exchange rate is another critical factor influencing the country’s economic performance. As of February 2025, the official exchange rate stood at ₦1,500.41 to the US dollar, reflecting ongoing pressures in the foreign exchange market. Addressing these issues will require a coordinated approach that balances short-term stabilisation measures with long-term structural reforms. For instance, diversifying the economy and reducing reliance on oil exports could help stabilise the exchange rate and reduce inflationary pressures.