Embed This Data
- GDP (PPP):
- $448.1 billion
- 6.3% growth
- 6.9% 5-year compound annual growth
- $2,720 per capita
- Inflation (CPI):
- FDI Inflow:
Nigeria’s economic freedom score is 54.3, making its economy the 129th freest in the 2014 Index. Its score is 0.8 point lower than last year, reflecting deteriorations in six of the 10 economic freedoms including business freedom, freedom from corruption, and labor freedom. Nigeria is ranked 26th out of 46 countries in the Sub-Saharan Africa region, and its overall score is below the world average.
Over the 20-year history of the Index, Nigeria has advanced its economic freedom score by 7 points. Scores for the control of government spending, monetary freedom, and trade freedom have improved by double digits, although these gains have been largely undercut by declines in six of the 10 economic freedoms including business freedom, labor freedom, investment freedom, and financial freedom. Scores for property rights and freedom from corruption have declined by 20 points or more.
For two decades, Nigeria has fluctuated between “repressed” and “mostly unfree.” The state intrudes heavily into private-sector activity. Regulatory barriers still prevent broad-based private-sector development, and much of the population remains engaged in subsistence agriculture.
President Goodluck Jonathan was re-elected in a contested election in 2011. Ethnic and regional violence, aggravated by the imposition of Islamic law in a number of states, has taken a heavy toll on the nation. Violence by the domestic terrorist group Boko Haram in the predominately Muslim North led the government to declare a state of emergency in May 2013. Nigeria is Africa’s most populous nation. It is also Africa’s leading oil producer, although sabotage of oil facilities and pipelines in the Niger Delta continues to impede operations. Oil and gas account for about 90 percent of export earnings and 80 percent of government revenue. Nigeria ranks 6th in the world in oil exports and 10th in natural gas reserves. The informal economy is extensive.
Corruption is pervasive, and government efforts to improve transparency and reduce graft have been inadequate. It is estimated that 100,000 barrels of oil are stolen every day from pipelines, ports, and storage tanks with the connivance of government officials. One of the world’s least efficient property registration systems makes acquiring and maintaining rights to real property difficult. Enforcement of copyrights, patents, and trademarks is deficient.
The top individual income tax rate is 24 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax (VAT) and a capital gains tax. The overall tax burden is equal to 4.7 percent of gross domestic income. Government spending is 29 percent of GDP. Public debt is equivalent to about 18 percent of the domestic economy. The government remains highly dependent on oil revenues to finance public accounts.
Red tape and inconsistent enforcement of commercial regulations burden the entrepreneurial environment. Obtaining necessary permits still takes more than 100 days and costs over 30 times the level of average annual income. The underdeveloped labor market is inefficient, and unemployment remains high. The government subsidizes and administers the prices of fuel and electricity.
The average tariff rate for Nigeria is 10.6 percent. High tariffs apply to imports that compete with domestically made goods. Political instability is a deterrent to foreign investment. The financial system remains weak and inefficient. Overall banking development is still hindered by bureaucracy and a cash-based economy. Banks interact with a very limited portion of the population, and access to financing is limited.