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- GDP (PPP):
- $479.3 billion
- 6.3% growth
- 7.0% 5-year compound annual growth
- $2,831 per capita
- Inflation (CPI):
- FDI Inflow:
Nigeria’s economic freedom score is 55.6, making its economy the 120th freest in the 2015 Index. Its score has increased by 1.3 points since last year, with improvements in five of the 10 economic freedoms, including labor freedom, freedom from corruption, and the management of government spending, outweighing a decline in monetary freedom. Nigeria is ranked 22nd out of 46 countries in the Sub-Saharan Africa region, and its overall score is below the world average.
Attempts to diversify Nigeria’s economy away from oil and gas have fallen flat. Over the past five years, economic freedom in Nigeria has declined by 1.1 points, with losses concentrated largely in the regulatory area.
Nigeria’s rule of law remains weak, and the corruption that accompanies high levels of government spending and pervades the oil sector inhibits private-sector growth. Strong linkage to global markets through the trade in crude oil is the only bright spot in trade and investment regimes that are protectionist and adverse to competition.
Nigeria achieved independence from Britain in 1960. Goodluck Jonathan became president after the sudden death of President Umaru Yar’Adua in 2010. Jonathan’s re-election in 2011 was heavily criticized among northern Muslims for not following the traditional Muslim–Christian rotating power agreement. In 2013, the government declared a state of emergency in three northern states and deployed security forces to combat the terrorist group Boko Haram. In April 2014, the al-Qaeda–linked Boko Haram kidnapped nearly 300 schoolgirls. Nigeria is Africa’s most populous nation and leading oil producer and has sub-Saharan Africa’s largest natural gas reserves. Security issues in the Niger Delta, political instability, corruption, and mismanagement hinder energy production. In 2014, Nigeria surpassed South Africa as the continent’s largest economy, but an estimated 61 percent of Nigerians live on less than $1 a day. Nigeria suffered from the 2014 Ebola virus outbreak in West Africa.
Moderately strengthened institutional capacity has checked some of the more blatant forms of corruption, but rent-seeking officials and politicians have found more subtle ways to defraud the Treasury with continued corrosive effects on politics and economic management. The public sector remains overstaffed, highly bureaucratic, and largely ineffective. One of the world’s least efficient property registration systems weakens property rights.
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 and a capital gains tax. Overall tax revenue accounts for 3 percent of domestic income. Government expenditures equal 28.2 percent of domestic output, and public debt is equivalent to 19 percent of gross domestic product.
Although the business environment has improved, regulatory procedures remain time-consuming and costly. The minimum capital requirement for starting a business has been eliminated, but completing licensing requirements still takes over 100 days. Much of the formal labor force is employed in the public or energy sectors. The state subsidizes and administers the prices of imported fuel and electricity.
Nigeria’s average tariff rate is 10.6 percent. Additional barriers restrict some agricultural imports, and imports may face customs delays. The legal and regulatory bureaucracies may be challenging for foreign investors. With 24 commercial banks, the financial sector continues to grow. The Nigerian Stock Exchange, with about 200 companies listed, has become a desirable financing option.