What Is Nigeria’s GDP Per Capita and Why Does It Matter?
Uncover what Nigeria's GDP per capita reveals about its economic well-being and why this metric is crucial.
Gross Domestic Product (GDP) per capita is a fundamental economic indicator, offering insights into a nation’s economic output relative to its population. This metric helps gauge the average economic well-being of individuals within a country. It provides a snapshot of prosperity, allowing for comparisons across different economies and over time.
Understanding GDP Per Capita
Gross Domestic Product (GDP) represents the total monetary value of all finished goods and services produced within a country’s geographical borders during a specific period, typically a year. It encompasses all private and public consumption, government outlays, investments, and net exports. GDP provides a comprehensive measure of economic activity and the size of an economy.
GDP per capita is calculated by dividing the total GDP by the country’s total population. This calculation adjusts the overall economic output to reflect it on an individual basis. It serves as an indicator of average living standards and economic development within a nation, reflecting output per person.
Nigeria’s Current GDP Per Capita
Nigeria’s Gross Domestic Product per capita has recently shown a significant decline. According to data from the International Monetary Fund (IMF), Nigeria’s GDP per capita stood at $877.07 in 2024, and is projected to decrease to $835.49 in 2025. This projected figure represents a 4.74 percent dip from the previous year and marks the lowest level in Nigeria’s recorded history.
This downward trend is part of a sustained decline observed since 2014, when the GDP per capita was $3,220. The World Bank reported Nigeria’s GDP per capita at approximately $6,207 in Purchasing Power Parity (PPP) terms for 2023, ranking it 146th out of 191 countries. The reduction in nominal GDP per capita indicates that economic growth is not keeping pace with population expansion.
Factors Influencing Nigeria’s GDP Per Capita
Several economic and demographic factors shape Nigeria’s GDP per capita. The country’s substantial reliance on the oil and gas sector, which makes up around 9 percent of the overall GDP, exposes the economy to volatile global oil prices, leading to fluctuations in national income. The oil sector contracted by 3.83 percent in 2023, straining economic output.
Rapid population growth exerts considerable pressure on the per capita figure. Nigeria’s population, exceeding 230 million, grows at approximately 3 percent annually, often outpacing economic expansion. This rapid increase dilutes economic gains across a larger number of people, hindering capital accumulation and the effective provision of social services.
The depreciation of the Nigerian Naira impacts the dollar-denominated GDP per capita. A significant devaluation, such as the 71.19 percent drop between September 2023 and September 2024, drastically reduces the value of domestic output when converted to U.S. dollars. This currency weakening also drives up the cost of imported goods, leading to high inflation, which reached 32.70 percent in the third quarter of 2024.
The performance of other key economic sectors plays a role. While the services sector, encompassing areas like telecommunications and fintech, has shown robust growth, contributing over 53 percent to GDP in Q3 2024, the manufacturing sector faces ongoing challenges with declining contributions.
The agricultural sector, which employs a large segment of the population, has seen slow growth and has not kept pace with the increasing population, limiting its ability to boost per capita income. Deficiencies in infrastructure, particularly power supply and transportation, also impede industrial activities and overall economic growth.