Naira devaluation drags Tinubu’s $1trn economy ambition – Report

The President Bola Tinubu government aims to hit a trillion dollar economy by 2030 but with the naira devaluation, the ambitious attempt might seem tough but not impossible.

This is according to a latest report released by Afolabi Olowookere, managing director and chief economist at Analyst Data and Resources (ADSR) Limited on Friday.

The report stated that the country had, at different times, launched different programs with the intention of reaching a trillion dollar economy by 2030, citing the National Development Plan and National Agenda 2050.

It indicated that the National Agenda 2050 aims to move Nigeria to the group of upper-middle-income countries, raising its per capita GDP from $2,084.05 in 2020 to $6,223.23 in 2030 and $33,328.02 in 2050.

The ADSR report however revealed that in setting these goals, a very conservative average exchange rate of about N500/US1 was adopted as against about N1,650/$ obtainable today.

“Naira depreciation/devaluation is the major drag in meeting the President’s vision of building a US$1trillion economy by 2030,” Olowookere said in the report.

Nigeria’s naira has depreciated by 71.15 percent between January 2023 and August 2024, rising from N461/$1 to N1,598.1/$1. Data from FMDQ showed that the naira now stood at N1,622.57/$1 on Thursday.

“Naira will likely continue to face gradual depreciation pressures due to trade imbalances and inflation,” the Ibadan-based research firm said.

The Nigerian economy, once largest in Africa, has been projected to slip to fourth behind South Africa, Egypt and Algeria with $253 billion valued nominal GDP.

The country’s statistical agency are on course to rebase the economy just as it did in 2014 when Nigeria clinched the largest economy title from South Africa.

But ADSR predicts that even with the rebasing method, the economy may not still be able to reclaim its title.

According to the research firm estimates, Nigeria’s economy which stood at $252.74 billion in 2023, if rebased, will hit $379.11 billion in 2024 and fall to $376.80 billion by 2025. This is however lower than South Africa’s $384.7 billion GDP.

“The Nigeria GDP current prices ($’bn) stood at $374.9bn as of2023. At the baseline scenario, the Nigerian economy is projected at $313.1bn in 2030.

“Following the inflation rate scenarios, though tough, it is not impossible that Nigeria can meet the $1 trillion target,” the report stated.