With a gross domestic product of $511 billion in 2021, Nigeria has the largest economy in Africa. However, the level of inclusive development is low: 40.09% of Nigerians are poor; the average years of education is 6.1 years; 14.3% of the population have never attended school; 36.8% of children under 5 suffer from malnutrition; the infant mortality rate is 75.7 per 1,000 live births.
All these factors combine to give a life expectancy at birth of 52.7 years. While economic growth has improved in the aftermath of the COVID-19 pandemic, many of the macroeconomic fundamentals have worsened. Inflation increased to 20.52% in August 2022; unemployment increased to 33.28% in the fourth quarter of 2020. The fiscal deficit of the federal government (FGN) grew to N3.09 trillion in Q1 2022.
Consequently, FGN’s debt stock increased to N35.67 trillion (comprising N20.95 trillion domestic and N14.72 trillion foreign) at the end of Q2 2022; with debt servicing surpassing revenue in Q1 2022. As the country moves towards the end of an administration and prepares to usher in a new government, the economy will feature prominently in the build-up to the 2023 elections.
This is because, in addition to the low level of inclusive development and weak macroeconomic fundamentals, there are currently harsh economic realities at the global level. These can be attributed to issues such as the slow recovery from the COVID-19 pandemic, the Russia-Ukraine crisis, disruptions in the global supply of goods, the surge in oil prices, the rapid rise in inflation especially the food and energy components, and the response to hikes in interest rates. All these issues will pose serious challenges to economies across the globe in the next few quarters.