Falling per capita income signals tough times ahead for Nigeria’s economy
Onome Amuge
Nigeria’s GDP per capita income dropped drastically by about 285 per cent in 11 years, pointing to a bleak future for the economy and Nigerians.
According to the International Monetary Fund ( IMF), the GDP per capita income of Africa’s most populous nation dwindled from $3,220 in 2014 to $835.49 in 2025.
A recent report by the IMF, indicates that Nigeria’s poverty situation has reached a critical juncture, with the country’s Gross Domestic Product (GDP) per capita plunging 4.74 per cent to $835.49 in 2025, from $877.07 in 2024.
The sharp decline, analysts pointed out, not only reflects the country’s lagging economic performance but also the deepening financial hardship faced by citizens in the most populous African country.
In economic terms, GDP per capita is considered a metric for assessing the average standard of living of a country’s citizens. It is essentially the GDP divided by the population, indicating the amount of goods and services produced per person in a given country. Moreso, this measurement provides a comprehensive view of the economic well-being and quality of life within a nation, reflecting the average productivity and earnings of its people.
The IMF data highlighted a downward spiral of Nigeria’s GDP per capita, which hit a record $3,220 in 2014, only to steadily decline since then. The same data, which covered a range of 191 countries, offers a bleak outlook for sub-Saharan Africa as a whole, with Nigeria and the majority of other African nations trapped in a $500 to $2,500 GDP per capita range, reflecting a persistently low economic output per capita across the region compared to other developed countries.
The latest IMF data uncovered a worrisome reality about Nigeria’s economic performance, with the country’s GDP per capita now dangerously close to that of Somalia ($818.65), a nation known for its extreme poverty rates and a history of failed state status.
Moreover, Nigeria’s current GDP per capita aligns with Sierra Leone’s ($883.49), placing it in the same GDP per capita range as another African nation that typically suffers from widespread poverty.
As Nigeria’s economy faced a steady decline, its neighbouring West African countries maintained a relatively stronger economic position, as indicated by the IMF data. Côte d’Ivoire topped its West African counterparts at $2,900, while Ghana’s GDP per capita stood at $2,190, leaving Nigeria’s $835.49 far behind. Similarly, the Benin Republic’s per capita stood at $1,590, while Togo registered a GDP per capita of $1,100. Chad and Mali also outpaced Nigeria, recording GDP per capita figures of $1,040 and $933.15, respectively.
According to the IMF data, Nigeria’s economic performance stands at a troublingly low level, ranking only slightly higher than several countries in Sub-Saharan Africa that are dealing with worse poverty and economic circumstances. These countries include South Sudan ($334.14), Sudan ($594.9), Central African Republic ($548.83), Democratic Republic of Congo ($743), Madagascar ($575.74), Malawi ($448.29), and Niger ($752.15).
Interestingly, Luxembourg ranked the world’s highest in terms of GDP per capita at $141,080, which is more than a hundred times greater than that of Nigeria, reflecting the world of economic difference that exists between developed countries and nations like Nigeria.
Though Nigeria’s current GDP per capita is a cause for concern, the IMF’s projections offer a more optimistic scenario for the country’s economic future. According to these forecasts, Nigeria’s GDP per capita is expected to rebound, with a predicted increase in 2026 and 2027. This steady rise is anticipated to culminate in 2028 when the country’s GDP per capita is expected to reach $1,040
Despite the current bleak outlook, the IMF has projected a more optimistic scenario for Nigeria’s GDP per capita, forecasting a gradual increase over the next few years. Based on these projections, Nigeria’s GDP per capita is expected to rebound, reaching the critical $1,000 milestone in 2028 at $1,040.
The harsh reality of Nigeria’s GDP per capita decline
While Nigeria’s population is known for its hardworking and resilient nature, the country’s economic landscape is currently struggling with a significant drop in productivity. This trend is reflected in a decline in its per capita income, a reflection that Nigerians are earning less or that the country’s economic growth has failed to keep up with population expansion.
According to IMF data, Nigeria’s GDP per capita has seen a 72.8 per cent drop since 2014, falling from $3,223 to its current level.
Economic analysts observed that the recent decline in Nigeria’s economic indicators is the result of policy missteps and mismanagement that have plagued the country’s economy for over a decade, undermining its overall economic output and increasing poverty levels across the nation.
According to SB Morgen Intelligence, the challenging economic environment in Nigeria has eroded the nation’s resilience, as evidenced by its dwindling GDP per capita and other key economic indicators.
“Nigeria’s GDP per capita has fallen to its lowest level since 2004 when placed against its smaller neighbours,” data by SBM Intelligence showed.
Analysts have identified two primary factors contributing to Nigeria’s troublingly low GDP per capita including a worrisome depreciation of the naira and persistent inflationary pressures that undermine the purchasing power of consumers.
Over the past decade, the official exchange rate of the naira has plunged significantly, tumbling from N150 per U.S. dollar in 2013 to hovering around N1,500 per dollar currently. The depreciation of the Nigerian currency has had a domino effect on the economy, leading to higher import costs and weaker purchasing power for Nigerian consumers, which further weighs down the country’s GDP per capita.
To make matters worse, inflation has skyrocketed, reaching a near three-decade high of 34.8 per cent in December 2024. The persistent rise in prices has eaten away at the purchasing power of the average Nigerian household, shrinking their real income, and leading to a downward spiral of the country’s GDP per capita.
The effects of a declining per capita income extend to nearly every facet of Nigeria’s economy, with rippling repercussions that could prove catastrophic if left unaddressed, analysts opine.
The economic challenges facing Nigeria have also been highlighted by the World Bank which reported that over half of its population, approximately 129 million out of 238 million people, are struggling to make ends meet.
It is a no-brainer that when income levels fall, citizens are left with less money to spend, which in turn reduces demand for goods and services. This has not only dampened business activity, but it also slows down economic growth and recovery, as businesses struggle to adapt to reduced demand and a shrinking customer base.
Economic experts caution that Nigeria’s ongoing per capita income crisis could have far-reaching implications if left unchecked, potentially leading to widening income disparities, increased poverty, and economic stagnation.
To tackle this pressing issue, analysts suggest implementing comprehensive policies focused on boosting productivity within the country, enhancing industrial production, and ensuring economic stability.
Adeola Adenikinju, the president of the Nigerian Economic Society (NES), underscored the importance of implementing policies that drive growth and attract substantial investments to Nigeria to counteract the rise in poverty and the widening gaps in wealth distribution caused by a falling per capita income.
The professor of Energy Economics also identified the negative impact of inconsistent policies, high energy costs, and an unwelcoming business environment on investor confidence. He stressed that reversing these factors would be essential to facilitate productive growth in Nigeria’s economy and improve the country’s economic standing both domestically and internationally.
Meanwhile Agusto & Co., in its latest report on the Nigerian economy titled “Macroeconomic Outlook: Stability or Stagnation – Will Policy Reforms Deliver Nigeria’s Promised Growth?” noted, “With significant political and economic capital already expended, the government is now at a critical crossroads, where retreat is no longer an option and the successful implementation of reforms and strategic policy interventions are imperative for sustainable progress.”
The research and credit ratings agency also identified three key areas of focus for Nigeria to improve its GDP per capita and facilitate economic recovery. These include enhancing oil production, improving fiscal transparency and stabilising the exchange rate.
Furthermore, Agusto & Co. emphasised the importance of addressing long-term drivers of inflation and seeking out alternate sources of revenue to alleviate fiscal pressure and promote stability.
In the short term, Nigeria’s economic challenges remain formidable. However, the agency believes that with prudent fiscal management and consistent monetary policy, Nigeria could gradually improve its economy, attract more investment, and boost investor confidence, leading to improved socio-economic outcomes in the medium term.