Known for its large population and its capacity to produce millions of barrels of oil per day, this African giant will lose its place as the leading economic power of the black continent.
Nigeria, since this is what we are talking about, will lose, from this year, its place as the leading African economic power.
Its GDP is expected to fall from $476.50 billion in 2023 to just $199.72 billion in 2024, according to the latest IMF forecast, showing a fall of -58.08%.
Thus, the most populous country in Africa should move from 1st African economic power in 2023 to 4th place in 2024, behind South Africa, Egypt and Algeria.
And by 2029, GDP should stand at $269 billion, according to forecasts from the Bretton Woods institution. That is, the country is not expected to improve its rank by 2029.
This fall cannot be explained by a recession in the Nigerian economy. On the contrary, it will show growth of 3.1% in 2024, according to IMF estimates, and continues to experience structural changes thanks to significant investments including the Dangote refinery (6th largest refinery in the world). , the construction of the country’s first deep-water port and several other investments (railways, highways, etc.).
In reality, this fall in wealth created by the Nigerian economy results solely from the impacts of repetitive “devaluations” of the naira against the dollar.
The Nigerian currency has depreciated significantly against the American greenback due to devaluations initiated by the Nigerian authorities.
Thus, we went from 1 dollar for 447.58 naira at the start of 2023, to 898 naira for the same dollar at the start of 2024. And currently, you have to pay 1,645 naira to have 1 dollar.
It is as if during the period from January 1, 2023 to October 25, 2024, the value of the Nigerian currency, expressed in dollars, was divided by 4.
And as GDP is calculated in local currency, the exchange rate effect has caused the wealth created to fall sharply when expressed in dollars.
