Analysts: With Sluggish GDP Growth, Attaining $1 Trillion Economy Tall Order

James Emejo in Abuja and Dike Onwuamaeze in Lagos

Analysts yesterday reacted to the country’s rebased Gross Domestic Product (GDP) estimates, which put the economy at fourth position in Africa.

National Bureau of Statistics (NBS) had pegged nominal GDP at N372.82 trillion (about $243 billion) as at 2024, reflecting a year-on-year increase of 18.30 per cent in nominal terms.

But the performance lagged behind South Africa with GDP of $410.34 billion, Egypt $347.34 billion, and Algeria $268.89 billion.

The country also recorded a growth of 3.13 per cent in the first quarter of the year (Q1 2025).

Post-rebasing, GDP at market prices increased by 41.7 per cent to N205.09 per cent in 2019, from N54.2 trillion (prior to rebasing), and rose to N213.64 trillion in 2020; N243.30 trillion in 2021; N247.23 trillion in 2022; N314.02 trillion in 2023; and N372.82 trillion in 2024.

In real terms, GDP grew -6.96 per cent in 2020 (COVID-19 year); 0.95 per cent in 2021; 4.32 per cent in 2022; 3.04 per cent in 2023; and 3.38 per cent in 2024, Adeniran stated.

The informal sector contributed N86.85 trillion or 42.5 per cent to overall economy, which was dominated by the services sector, which accounted for 53.09.per cent post-rebasing, compared to 52.60 per cent prior to the exercise.

However, analystswho.spoke to THISDAY said given the unimpressive performance of the economy, achieving the current administration’s aspiration for $1 trillion economy by 2030 had become a daunting challenge.

Economist and Chief Executive, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the rebasing exercise was not as dramatic as many had expected.

He said the outcome showed that the country’s journey to the projected $1 trillion economy remained a tough call and long way ahead – though the country would be inching closer to the aspiration.

He however, projected the Nigerian economy to reach $400 billion by the end of 2025.

Yusuf said Nigerians now have a clearer view about the size and structure of the economy as well as the sectorial contributions to the GDP.

He said, “We now know that the economy is bigger than what we thought but not as big as many analysts would have expected.

“We have also seen some structural changes in the economy. For instance, we are seeing a much bigger role in the economy for the real estate sector that is now occupying the third position in contribution to the GDP, which is quite significant.”

Yusuf also said that the result of the rebase economy would also enhance Nigeria’s ranking in the global and African economies, adding that it is a good and welcome development.

He said, “Talking about the structure of the economy, before the rebasing agriculture was contributing 22.12 per cent but now we are seeing about 25.58 per cent.

“Industry before the rebasing was accounting for 27.7 per cent of the GDP. Now it is accounting for 21.08 per cent of the GDP.

“The service sector was 50.22 per cent, now it is 53.09 per cent. You can see the shift in the structure of the economy. The service sector is rising faster than the real sector.”

He added that in the past water transport was contributing less than one per cent of the GDP but now it has risen by over 1,367 per cent.

According to him, “It meant that it has been grossly under reported over the years. Now the activities of the Nigerian Port Authority, Nigerian Maritime Administration and Safety Agency, National Inland Water Ways Authority and Nigeria Shippers Council have now been incorporated into the GDP.

“It is also significant that the contribution of the informal sector has increased to 42.5 per cent from 41.4 per cent.”

Yusuf, also stated that the latest rebasing of the economy would affect the assessment of critical issues like tax to GDP ratio, fiscal deficit to GDP ratio, debt to GDP ratio, credit to the economy to the GDP ratio and other whole lot of issues that the GDP is used to determine.

“So, from that point of view, it is good for economic analysis. It is also good for international comparison. By the time we adjust the GDP to accommodate the Q1, Q2, Q3 and Q4’25, we will be moving closer to a GDP of $400 billion by the end of 2025.

“The factors responsible as stated in the report are growth in agriculture, real estate, water sector and the service sector that have increased significantly.

“But as to whether we will achieve the projected $1 trillion economy that is a tough call. Given where we are now it is still a long way ahead. We may inch closer to it but it is still a long way ahead.”

Also, Economist/Group Managing Director/Chief Executive, Bristol Investments Limited, Dr. ChijiokeEkechukwu, said the new GDP estimates showed the country still had a way to go in achieving its target.

He said there was need to  industrialise the economy and boos agricultural productivity.

The former Director General, Abuja Chamber of Commerce and Industry (ACCI), said, “We have waited for the debasing of the GDP, and here it has come.

“Having a $243 billion economy after debasing tells us the magnitude of work yet to be done.

“The countries that are ahead of us have everything to justify their positions.”

According him, “When we check sector by sector, we will notice the quantum of work to be done.

“We need to be more industrialised, our agricultural productivity needs to grow and sustain   our food security.

“The non oil sector has driven the economy even when the oil sector is the major driver of our revenue.

“We need to rev the solid mineral sector, the gas sector, and the agricultural sector by having functional green house farms in all states of the federation, which may be veritable alternatives considering the insecurity in our conventional farms.”

However, Managing Director/Chief Executive, SD&D Capital Management Limited, Mr. IdakoloGbolade, said the rebasing exercise was expected to increase the size of the economy with significant impact on macroeconomic ratios.

He clarified that rebasing of the GDP does guarantee improvement of the standard of living of Nigerians or have a real impact on what the citizens are presently suffering.

He said, “However, so many factors like tax to GDP ratio which is very low might be increased to match the new GDP.

“These activities would definitely have negative effect on ordinary Nigerians who are facing eroding income, high unemployment, high inflation and other debilitating factors. 

“Economically, Nigeria’s GDP expansion is a step in the right direction to ensure that we take the positives that would enable us move closer to a $1 trillion economy by 2030.”

According to Idakolo, “The newly re- based GDP shows that there is a lot of work to do in non-oil revenue sector which can make more impact in achieving the targeted $1 trillion economy. 

The federal government infrastructural development strategy also has to be fine tuned to accommodate an economy of the size we envisage”