IMF projects Nigeria’s economy to reach $1.85 trillion by 2029

By Innocent Raphael 

The International Monetary Fund (IMF) has projected that Nigeria’s economy will grow to at least $1.85 trillion in purchasing power parity (PPP) terms by 2029. 

PPP is a metric used to compare the value of different currencies and their ability to buy the same goods and services, thereby assessing economic productivity and living standards across countries.

According to the Washington-based institution, Nigeria’s gross domestic product (GDP) in PPP terms is expected to rise from $1.44 trillion in 2024 to $1.85 trillion in 2029. 

The IMF’s data shows a steady growth trajectory, with the GDP projected to reach $1.52 trillion in 2025, $1.58 trillion in 2026, $1.67 trillion in 2027, and $1.75 trillion in 2028. This consistent growth trend is capped by a notable 5.5 per cent increase expected in 2029.

Notably too, the IMF forecasts that Nigeria’s share of global GDP based on PPP will grow slightly, from 0.77 per cent in 2023 to 0.78 per cent by 2029, indicating a steady increase in the country’s economic influence.

However, this optimistic projection comes amid challenges. Nigeria’s purchasing power has been adversely affected by a high cost of living and soaring inflation. The inflation rate climbed from 22.41 per cent in May 2023 to 33.69 per cent in April 2024, with food inflation surging from 24.82 per cent to 40.53 per cent over the same period.

The country’s GDP growth rate has also shown fluctuations over the past year. In Q2 2023, the GDP grew by 2.51 per cent year-on-year, down from 3.54 per cent in the same quarter of the previous year. 

The GDP growth rate was 2.54 per cent in Q3 2023, up from 2.25 per cent in Q3 2022. Q4 2023 saw a growth rate of 3.46 per cent, slightly below the 3.52 per cent recorded in Q4 2022. The trend continued in Q1 2024, with the GDP growth rate reaching 2.98 per cent, compared to 2.31 per cent in Q1 2023.

Despite these economic challenges, the IMF’s projection indicates a positive long-term outlook for Nigeria’s economic growth.