Indian School of Business
Gross Domestic Product (GDP)3
Labor Market & Human Capital7
Population and Income Inequality8
Money Supply and Monetary Control10
Foreign Direct Investment14
Globalization and Comparative Advantage14
Nigeria's economy is estimated to be worth about $262bn, making it one of the largest economies in Africa. The estimates and analysis of various indicators is discussed in the later sections. The country has fared better than many other countries during the global economic downturn, but systemic problems in infrastructure and the labor market mean that its position in the Economist Intelligence Unit's global rankings remains towards the bottom during the forecast period, at 75th out of 82 countries. Efforts to create a significantly more attractive business environment are likely to produce only modest results owing to the slow pace of more fundamental reforms.
Nigeria has taken steps to simplify trade by working on its tariff structure. However, there is still a protectionist sentiment in the country. Cross border smuggling is still a major concern and is liable to remain an important feature of the Nigerian economy.
The capacity and efficiency of Nigerian ports (Trade) have improved following the implementation of an ambitious concessioning program that transferred management of terminals to private operators. However, although the reforms have improved port operations and ship turnaround times, there remains the problem of corruption in the customs service, which can complicate and delay the clearance of goods. Gross Domestic Product (GDP)
The latest GDP projection data as brought out by World Bank is $ 268.5 billion (2013 F) and the country population is projected at 175 million translating into a GDP/Capita to 2,213. The Real GDP Growth for Nigeria has been at 6.8 %. However, considering the disparity in the country’s infrastructure viz-a-viz other Asian developing nations the growth rate is not enough for substantial improvement. Nominal GDP| 2007| 2008| 2009| 2010| 2011| 2012(F)| 2013(F)| US$ bn| 166.5| 208.1| 169.4| 196.3| 244.2| 262.4| 268.5| N bn| 20,941| 24,665| 25,225| 29,498| 37,590| 42,877| 46,720| Real GDP growth %| 6.4| 6| 7| 7.8| 7.4| 6.4| 6.9|
Source: Economic Intelligence Unit|
In Nigeria, the Investment component of the GDP as compared to the private consumption and government is very low, hovering at 17 % approximately. A developing market is required to invest around 40 to 50% of GDP in capital investment for successive number of years. However that is not seen with Nigeria. Hence, the prospect of Nigeria as an investment destination appears to be grim in the near future. | 2007| 2008| 2009| 2010| 2011| 2012 F| 2013 F|
Private consumption| 6.6| -34.3| 6.4| -26.7| 11.8| 9.8| 10.4| Government consumption| 90.8| 4.4| -8.1| 17.8| 12| 8.5| 8| Gross fixed investment| 24.5| -6.8| 9.1| -3.6| 6.5| 6| 6.5| Exports of goods & services| -11.7| 43.4| -30| 11.4| 11.9| 10.4| 12.4| Source: Economic Intelligence Unit|
The graph below gives the GDP contribution - Industry wise for Nigeria. Crude is one of the major contributors to the GDP. Hence, and rate fluctuations in the price of crude oil have added volatility in the Nigerian GDP.
Despite monetary tightening carried out by the CBN in 2011, the forecast for inflation remains negative. Inflation is expected to increase to 12.7% in 2012. Fiscal laxity by the states is one of the main reasons for this. In addition, the payment of the newly instituted minimum wages and the...