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Economy Overview
Diversification will support sustainable development
Although Nigeria’s economy is still dependant on its oil sector, which provides 97.5 per cent of foreign exchange earnings and roughly 80 per cent of budgetary revenues, the government is beginning to take the necessary steps towards diversification. Despite declining output from the oil sector (which together with gas still accounted for 17 per cent of GDP in 2009), strong performance in other sectors kept the overall growth rate at 6.1 per cent in 2008, a slight fall from 2007.
By 2009, despite the global economic crisis and weak oil sector, Nigeria had a real GDP growth rate of 4 per cent, projected to rise slightly higher by the end of 2010 and to a respectable 5.5 per cent by the end of 2011. However, the global recession, coupled with rising food prices, and the drying up of lending as a result of the banking crisis, means the inflation rate has held at about 11 per cent for most of 2010, up from 2007’s 5.4 per cent. This is still a significant improvement on 2005, when the rate stood at 17.8 per cent, and December 2008, when the rate was 15.1 per cent. The stability of the naira, which has held steady against the US dollar throughout the year at about NGN150 to USD1, should stop any further inflation increase.
The Organisation for Economic Co-operation and Development (OECD) estimates the country’s GDP as being USD216.8 billion. Other sources put the 2008 purchasing power parity GDP at USD336.2 billion. GDP per capita remains low, at USD1431, despite Nigeria’s oil wealth. The World Bank estimates that 54 per cent of the population has a daily income of less than one US dollar.
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