Nigeria’s economy is growing again after contracting in 2016. Weak oil prices, foreign exchange shortages and clashes with Jihadist militants (Boko Harem) caused the economy to contract. But recovery in the oil and agricultural sectors has pulled the economy out of recession. Attempts to rein in elevated budget deficits and the recovery in oil prices have reduced external imbalances and improved investor confidence. But medium-term growth prospects remain constrained by inadequate infrastructure and over reliance on oil. The IMF expects growth of around 2% p.a. over the next five years.
Nigeria’s per capita income has risen on average 7.5% p.a. over the last 15 years driven predominantly by elevated commodity prices over much of that time. But the sharp deterioration in commodity prices and 2016 recession has weighed on household incomes. Muted growth will prevent GDP per capita from reaching the highs experienced during the commodities boom.