"Nigeria\u2019s Per Capita Income Hits 20-Year Low on Weak Economy"

" Nigeria's Per Capita Income Hits 20-Year Low on Weak Economy \r\n\r\nPer capita income earned by an average Nigerian has plummeted by a staggering 72.8 percent, the lowest since 2004.\r\n\r\nThe slump is as a result of policy missteps made in the last decade that have weakened the Nigerian economy and worsened citizens\u2019 living conditions, according to SB Morgen, a Lagos-based data and intelligence gathering firm.\r\n\r\nThe per capita income stood at approximately $3,223 in 2014, but recent estimates by the International Monetary Fund (IMF) indicate it has plunged to $877 this year. This dramatic decline, one of the sharpest in the region, shows a weakened economic resilience in the face of internal and external pressures.\r\n\r\n\u201cNigeria\u2019s GDP per capita has fallen to its lowest level since 2004 when placed against its smaller neighbours,\u201d a recent chart by SBM revealed.\r\n\r\nBut while Africa\u2019s most populous nation has seen its average income earned per person nosedive in the last 10 years, per capita incomes of West African peers like Ghana, Cote d\u2019Ivoire and even Benin Republic have been modest.\r\n\r\n<img class=\"aligncenter size-large wp-image-902603\" src=\"https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--1024x750.png\" sizes=\"(max-width: 1024px) 100vw, 1024px\" srcset=\"https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--300x220.png 300w, https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--1024x750.png 1024w, https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--768x562.png 768w, https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--417x305.png 417w, https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--546x400.png 546w, https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--225x165.png 225w, https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--254x186.png 254w, https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--183x134.png 183w, https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--100x73.png 100w, https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014--285x209.png 285w, https:\/\/cdn.businessday.ng\/wp-content\/uploads\/2024\/11\/ABtVr-nigeria-s-gdp-per-capita-and-west-african-peers-percentage-rise-fall-since-2014-.png 1240w\" alt=\"\" width=\"1024\" height=\"750\" \/>\r\n\r\n\u201cNigeria is the only country in the sample whose income per head has dropped since 2014 and the only one whose income per head has risen in double digits since the year 2000,\u201d SBM Intel said.\r\n\r\n\u201cGiven that the same global headwinds affecting Nigeria affect all of these ECOWAS countries along the Gulf of Guinea, this is ample evidence of poor policy-making in Nigeria over the last decade,\u201d it added.\r\n\r\nAccording to Adeola Adenikinju, president of Nigerian Economic Society and professor of Economics, Nigeria\u2019s GDP per capita has underperformed not just in the last decade but since 1960.\r\n\r\n\u201cNigeria\u2019s GDP per capita in 1960 was about $230 and twice that of China and higher than that of India. But if you fast forward to 2023, the country\u2019s per capita income is just 7 percent that of China,\u201d Adenikinju said.\r\n\r\nNigerians\u2019 average income is depleting as its economy is also tanking as a result of low growth and lack of productivity. The Nigerian nominal GDP, once biggest in Africa, slipped to $285 billion in 2024, making it fourth largest in Africa.\r\n\r\nSamuel Sule, the CEO of Renaissance Capital Africa, attributed the decline in Nigeria\u2019s per capita income to the fall in GDP (in USD terms) driven by economic policy and a rise in population.\r\n\r\n\u201cNigerians are less well-off and have lower standards of living in the last decade or compared to many other frontier markets, including our African neighbours,\u201d he said.\r\n\r\n Currency devaluation, inflation eroding per capita income \r\n\r\nThe primary drivers of persistent fall in Nigeria\u2019s GDP per capita are the free fall of the naira and the rising inflationary pressures eating up savings and spending power, according to Michael Adeyemi, an Economics lecturer at Lagos State University.\r\n\r\nThe value of the naira has seen a sharp decline in the last decade, with the official exchange rate moving from around N150 per U.S. dollar in 2013 to over N1,700 per dollar today.\r\n\r\nThis devaluation has led to higher import costs, pushing up prices on essential goods and reducing purchasing power. Coupled with double-digit inflation, which stood at 32.7 percent in September, the average Nigerian household has seen its real income shrink substantially.\r\n\r\nThe consequences of this downturn in the country\u2019s economic trajectory are grave. According to the most recent report by the World Bank on Nigeria, about 129 million of the citizens are living in poverty for a population of an estimated 238 million people.\r\n\r\nA continued disparity in income inequality could exacerbate social unrest and tension as more Nigerians feel marginalised.\r\n\r\n How can Nigeria get back on track? \r\n\r\nThe rising tide of poverty and widening inequalities occasioned by a falling per capita income can be calmed by ensuring policies that stimulate growth and encourage runaway investments into the country, according to Adenikinju, cited earlier.\r\n\r\nHe stated that productive growth of the Nigerian economy has been negative for the past years as inconsistent policies, high energy cost and hostile business environment are hurting investor confidence.\r\n\r\n\u201cWe have policies that are not conducive for growth. There are also corruption and even the underperformance of the oil sector. On the efficiency side, we have not done well,\u201d the former member of the Monetary Policy Committee of the Central Bank of Nigeria (CBN) said.\r\n\r\nFor Ibrahim Rafiu, a financial analyst and economist, the slowing GDP per capita can be turned around if the country diversifies and invest more in the non-oil sector.\r\n\r\n\u201cDiversification is key to reducing the country\u2019s economic vulnerabilities,\u201d he said.\r\n\r\n\u201cInvestments in agriculture, technology, and manufacturing could stimulate job creation and foster economic resilience against oil price shocks. For example, supporting local agriculture can reduce food import reliance and keep prices more stable for consumers,\u201d the university lecturer added."

"Nigeria\u2019s Per Capita Income Hits 20-Year Low on Weak Economy"

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