2022 Index of Economic Freedom

Nigeria

OVERALL SCORE54.4
WORLD RANK124
Rule of Law

Property Rights22.1

Judicial Effectiveness33.8

Government Integrity22.7

Government Size

Tax Burden84.8

Government Spending95.3

Fiscal Health58.1

Regulatory Efficiency

Business Freedom41.2

Labor Freedom73.6

Monetary Freedom67.5

Open Markets

Trade Freedom68.6

Investment Freedom45.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 206.1 million
  • GDP (PPP):
    • $1.1 trillion
    • -1.8% growth
    • 0.3% 5-year compound annual growth
    • $5,187 per capita
  • Unemployment:
    • 9.0%
  • Inflation (CPI):
    • 13.2%
  • FDI Inflow:
    • $2.4 billion

Nigeria’s economic freedom score is 54.4, making its economy the 124th freest in the 2022 Index. Nigeria is ranked 23rd among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

The Nigerian economy grew from 2017 through 2019, turned negative in 2020, and rebounded in 2021. The country’s five-year trend of mediocre economic freedom has continued. Dragged down by score decreases in fiscal health and property rights, Nigeria has recorded a 2.7-point overall loss of economic freedom since 2017 and has fallen to the lower half of the “Mostly Unfree” category. Monetary freedom and trade freedom demonstrate some promise, but scores for rule of law and financial freedom are very low.

IMPACT OF COVID-19: As of December 1, 2021, 2,978 deaths had been attributed to the pandemic in Nigeria, and the government’s response to the crisis ranked 62nd among the countries included in this Index in terms of its stringency. The economy contracted by 1.8 percent in 2020.

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Background

Nigeria is Africa’s most populous country. A new constitution established civilian government in 1999. President Muhammadu Buhari won reelection in 2019 despite long absences from the country and rumored ill health. A multinational coalition has expelled the Islamist terrorist Boko Haram from many of its strongholds in northeast Nigeria, but attacks by the increasingly powerful Islamic State West Africa Province continue. There also have been lethal outbreaks of violence in the Middle Belt, Niger Delta, and northwestern regions. The petroleum-based economy’s fortunes rise and fall with the price of oil. Agriculture, telecommunications, and services are contributing to modest economic growth, but more than 60 percent of Nigeria’s 170 million people still live in extreme poverty.

Rule of Law

Property Rights 22.1 Create a Graph using this measurement

Judicial Effectiveness 33.8 Create a Graph using this measurement

Government Integrity 22.7 Create a Graph using this measurement

The government recognizes secured interests in property, such as mortgages, but enforcement is weakened by poorly regulated, complex, and corrupt state-level property registration and titling systems. Disputes over land ownership in rural areas are common. The judiciary is vulnerable to political interference. Courts lack adequate funding, equipment, and training. Corruption is pervasive in both public and private institutions.

Government Size

The top individual income tax rate is 24 percent, and the top corporate tax rate is 30 percent. Other taxes include value-added and capital gains taxes. The overall tax burden equals 6.3 percent of total domestic income. Government spending has amounted to 12.5 percent of total output (GDP) over the past three years, and budget deficits have averaged 5.0 percent of GDP. Public debt is equivalent to 35.1 percent of GDP.

Regulatory Efficiency

Corruption among customs and port officials and others interferes with business freedom. It is hard to run a business or to be gainfully employed in the locales where violence and murder are common occurrences. Educated Nigerians often emigrate. The government’s generous and budgetarily untenable monthly spending on fuel subsidies for consumers is increasingly burdensome.

Open Markets

Nigeria has two preferential trade agreements in force. The trade-weighted average tariff rate is 8.2 percent, and one formal nontariff measure is in effect. However, barriers to trade and investment persist in the form of bureaucratic delays. The financial sector is dominated by banking and is growing unevenly across the country. Nonperforming loans continue to be a problem.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius70.9-6.1
2Cabo Verde66.72.9
3Botswana64.8-2.8
4Côte d'Ivoire61.6-0.1
5Seychelles61.1-5.2
6Benin611.4
7São Tomé and Príncipe60.34.4
8Senegal602.0
9Ghana59.80.6
10Tanzania59.5-1.8
11Namibia59.2-3.4
12Madagascar58.91.2
13Burkina Faso58.31.8
14The Gambia58-0.8
15Togo57.2-0.3
16Rwanda57.1-11.2
17South Africa56.2-3.5
18Mali55.90.3
19Gabon55.8-2.3
20Mauritania55.3-0.8
21Djibouti55.3-0.9
22Niger54.9-2.4
23Nigeria54.4-4.3
24Uganda54.2-4.4
25Guinea54.2-2.3
26Malawi530.0
27Cameroon52.9-0.5
28Kenya52.6-2.3
29Angola52.6-1.6
30Sierra Leone520.3
31Eswatini51.4-3.7
32Mozambique51.3-0.3
33Comoros50.4-5.3
34Chad49.8-0.6
35Ethiopia49.6-2.1
36Zambia48.7-1.7
37Republic of Congo48.5-2.2
38Lesotho48.1-5.4
39Liberia47.9-1.3
40Democratic Republic of Congo47.6-1.4
41Equatorial Guinea47.2-2.0
42Guinea-Bissau46-8.9
43Central African Republic45.7-3.1
44Eritrea39.7-2.6
45Burundi39.4-10.5
46Zimbabwe33.1-6.4
47Sudan32-7.1
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