Analysts have attributed Nigeria’s recent slip to the fourth largest economy in Africa to the whopping devaluation of the naira and other policy missteps.
Despite growing by 3.4 percent in 2024 and recording an 18.91 percent increase in nominal Gross Domestic Product (GDP), the depreciation of the naira caused the Nigerian economy to drop to the fourth place in the continent in dollar terms, the analysts said.
The value of the naira depreciated by 40.9 percent in the course of last year, eating up the growth the economy recorded in the course of last year.
According to the data released recently by the International Monetary Fund (IMF) as highlighted by Africa Export Import Bank (Afreximbank), Nigeria, which was Africa’s largest economy, fell to the fourth position.
The data showed that South Africa reclaimed the top spot with a projected GDP of $400.19 billion, followed by Egypt at $383.11 billion and Algeria at $264.91 billion. Nigeria, however, dropped to the fourth position with $187.64 billion GDP.
Also, data from the National Bureau of Statistics (NBS) showed that for the full year 2024, Nigeria’s GDP grew by 3.40 percent, an increase from 2.74 percent in 2023. In nominal terms, aggregate GDP for Q4 2024 stood at N78.37 trillion, reflecting an 18.91 percent increase from N65.91 trillion recorded in Q4 2023.
The IMF’s latest growth projections for the country put the growth figures for 2025 and 2026, to 3.0 for 2025 and 2.7 for 2026 amid global uncertainties and sustained weaknesses in oil prices impacting the country’s economy.
Pointing to the need for structural reforms to restore stability and investor confidence, Afreximbank said the shift in Nigeria’s position on the continent’s economic leaderboard “underscores the deep-rooted macroeconomic imbalances Nigeria continues to grapple with.
“Notably, Nigeria, often regarded as Africa’s largest economy in the past, now ranks fourth at $187.64 billion. The dip underscores the deep macroeconomic imbalances and foreign exchange challenges Nigeria faces despite its vast population and resource base.”
To the chief executive of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, “The sharp drop in our GDP figures, which has also reflected in our economic ranking on the continent, is largely a consequence of the exchange rate depreciation.”
Noting that the valuation of the economy based on the current exchange rate had led to the drop in Nigeria’s GDP ranking, he said “as far as the ordinary citizens are concerned, the issue is not so much about GDP.
“The issue is about welfare, it is about living conditions, cost of living, access to education, access to health, the quality of infrastructure and productivity in the economy. Although, to some extent, these things are related, these are the more important issues for the average Nigerian and even for businesses.
“Businesses are looking forward to better infrastructure. They’re looking forward to better security and macroeconomic stability. Those issues are even more important than conversations around nominal GDP. But having said that, GDP also has its place in an economy.
“To drive GDP growth, we need to do a lot more to drive investment growth – whether we are talking about private investment or government investment, especially in infrastructure. And to drive the growth of investment, we need to ensure that we have the right kind of environment – the right kind of macroeconomic environment. By that, I mean stability of our exchange rates, lowering of inflation, ensuring a more investment-friendly credit environment, and ensuring a reduction in our fiscal deficit and our debt servicing cost. These things are critical to ensure macroeconomic stability.
“Then, we need to commit more to raising productivity in the economy. Increasing productivity has a lot to do with addressing the structural issues in the economy. I’m talking now about things that relate more to infrastructure, the quality of our logistics, efficiency at the ports, connectivity within the economy, our power sector, access to power, and all of those things – including human capital development. Those things are critical for increasing productivity in the economy. That is also very crucial to ensuring that we improve our GDP performance.
“Third, we must ensure that we improve the social conditions of the citizens. The social conditions are critical to ensure that we have a very productive population – a population that has a higher standard of living. That will require investment in our social infrastructure, investment in health, investment in education, and ensuring the protection of the environment.
“Also, very critical to improving our GDP and productivity is addressing the issue of insecurity. The agricultural sector accounts for about 24% of our GDP. This sector has been seriously or considerably devastated by insecurity. So, to restore the glory of this very critical sector of the economy, we need to fix the problem of insecurity in the country.”
On his part, the chief executive of CFG Advisory, Tilewa Adebajo, said the decline led to policy inconsistencies and poorly implemented reforms, which have led to a crippling 300 percent devaluation of the naira.
Adebajo noted that the nation’s GDP now stands at $200 billion, placing Nigeria as the fourth largest economy in Africa, behind South Africa, Egypt and Algeria.
“The macroeconomic situation has deteriorated significantly. Nigeria’s devaluation, low productivity and stagflation have resulted in a loss of over $300 billion in value.” He stated noting that Nigeria’s 18-month economic reform programme has delivered mixed results, largely due to poor execution and misplaced priorities.
The most significant impact has been the devaluation of the naira from N450 to over 1,700 per US dollar. Combined with the removal of fuel subsidies, these reforms have led to higher inflation, reduced purchasing power, and soaring interest rates.
“The social intervention programmes meant to cushion the effects of these changes have fallen short, failing to provide meaningful relief to households and businesses. Meanwhile, the country’s borrowing has surged, exceeding $100 billion, with debt servicing costs skyrocketing from N8 trillion in 2024 to N16.3 trillion in the 2025 budget. Alarmingly, debt servicing now surpasses combined allocations for defence, infrastructure, education, health and security, totaling N14 trillion,” he said.
Missed Opportunities and Policy Gaps
Adebajo added that rather than reinvesting savings from subsidy removal into capital projects to stimulate growth, the funds have been channelled into debt servicing.
“Money supply has risen by 50 percent year-on-year, peaking at a historic N108 trillion, undermining the Central Bank of Nigeria’s (CBN) ability to control inflation.
“These are the things that are very critical to ensuring that we’re able to restore the stature and ranking of the Nigerian economy within the continent. A whole lot of this also has to do with the quality of governance, because we are talking about the right policy environment -trade policy, monetary policy, fiscal policy, tax policy. These are governance issues, and all of these are critical in creating the right kind of environment to ensure that we grow our GDP,” he stated.
Adesina: 5 Candidates Intensify Campaign For AfDB Presidency
BY BUKOLA ARO-LAMBO, Lagos With Agency Reports
As the African Development Bank (AfDB) gears up for a critical leadership transition, five candidates from across the continent have emerged for the presidency of Africa’s premier development finance institution.
The election, slated for May 29, 2025, during the annual meeting of the continental bank’s board of governors, promises to be one of the most consequential in recent history, coming at a time of mounting economic and geopolitical headwinds for the region.
The office is currently held by Nigeria’s former minister of Agriculture, Dr Akinwumi Adesina, whose tenure will expire on August 31 this year. Adesina will serve out his second five-year term and step down on that date.
The contenders are Ms Bajabulile Swazi Tshabalala of South Africa, Mr Amadou Hott of Senegal, Dr Samuel Munzele Maimbo of Zambia, Mr Sidi Ould Tah of Mauritania and Mr Abbas Mahamat Tolli of Chad, all bring rich professional pedigrees and ambitious visions for Africa’s future.
The Contenders And Their Credentials
Swazi Tshabalala of South Africa currently serves as the AfDB’s senior vice president. Tshabalala is the only woman in the race. Her career straddles the public sector, private finance and development finance. She is a former CEO of the Industrial Development Group and served as CFO at the South African Airways.
In her ‘Lift Africa’ strategy, Tshabalala outlines a three-pronged approach: Large Integrated Infrastructure (LI), Financial Innovation and Private Sector Development (F), and Transforming the Bank Internally for Execution (T). Her vision zeroes in on Africa’s chronic infrastructure gap, from roads and electricity to digital connectivity, as the central constraint to job creation and regional integration.
With her extensive background in investment banking and operations within the bank itself, Tshabalala presents herself as a pragmatic technocrat with a tested grasp of the private sector’s needs and institutional reform.
A former minister of Economy, Planning, and International Cooperation in Senegal, Amadou Hott, also served as AfDB’s vice president for Power, Energy, Climate and Green Growth. A seasoned development banker with stints at the Islamic Development Bank and private equity, he is seen as both technically grounded and politically savvy.
Hott believes that Africa must become more self-reliant in the face of declining aid and shifting global priorities. His platform is built on three pillars: investing in human capital through education and skills development; unlocking job opportunities by making economies competitive via infrastructure and energy; and attracting investments through reforms.
Hott appeals to the youth and private sector, stressing that employment generation and intra-African trade integration must be at the heart of the bank’s next phase. His mix of political experience and multilateral credentials positions him as a formidable contender.
Candidate number three, Dr Samuel Maimbo of Zambia, is a renowned economist and international development specialist, having held senior roles at the World Bank, including Chief of Staff to the President and Director of Finance. With a PhD in Public Policy and deep experience in sovereign finance, he brings a sharp institutional reform agenda.
Maimbo identifies Africa as being at a crossroad, where the time for incremental change is over. His vision calls for strengthening the Bank’s governance, diversifying leadership, investing in staff and modernising financial instruments. He is a vocal advocate for tackling Africa’s debt crisis through sustainable mechanisms and calls for rationalising the continent’s risk premium.
His results-driven orientation and focus on institutional efficiency could resonate with member countries seeking a strong manager and reformer-in-chief.
Currently, the director-general of the Arab Bank for Economic Development in Africa (BADEA), Sidi Ould Tah of Mauritania, has accumulated over two decades of experience in economic development. He previously served as Mauritania’s Minister of Economic Affairs and Development.
Tah’s pitch revolves around transforming Africa’s wealth into prosperity – especially by promoting value addition, unlocking the potential of women and youth, and boosting micro, small and medium enterprises (MSMEs).
He emphasises domestic resource mobilisation, noting that Africa has untapped sources like pension funds that could be deployed for development.
Tah’s experience at BADEA provides him a continental perspective on financing instruments and his strong emphasis on MSMEs aligns with the reality that these businesses make up 90 percent of Africa’s economy.
The governor of the Bank of Central African States (BEAC), Abbas Mahamat Tolli from Chad who was the former Minister of Finance in his country, is the dark horse of the race. His candidacy reflects deep central banking experience and a clear-eyed focus on fiscal responsibility.
Tolli’s core message is pragmatic: reduce Africa’s high commercial and logistical costs, diversify economies, and address the continent’s reliance on food imports. He identifies renewable energy, infrastructure, and agriculture as priority areas.
While less prominent than his rivals in development finance circles, Tolli’s monetary policy expertise could prove valuable for a bank increasingly involved in regional financial stability. He champions practical solutions and tangible results, calling for faster project execution and decentralised development strategies.
According to the bank’s election timetable, the Board of Governors has until May 28 to hold closed-door sessions with each of the five contenders, with the election occurring the next day.
By tradition and charter, the AfDB president must garner a dual majority: a majority of regional member countries and a majority of shareholder voting power, which includes non-African countries such as the US, Japan and several EU members.
This complex voting matrix often leads to behind-the-scenes diplomacy, regional lobbying, and alignment among economic blocs like ECOWAS, SADC and the Maghreb. Political compatibility, managerial experience, and institutional knowledge often weigh as much as technical merit.
The only female candidate, Tshabalala stands out as a continuity candidate, with deep institutional knowledge and strong operational experience within the bank. She may appeal to both African shareholders seeking stability and non-regional members looking for efficient execution.
Senegal’s Hott’s high-profile ministerial role and international engagement offer him political clout and a reformist edge. His ties to both AfDB and the wider multilateral system make him a strong regional pick, especially among Francophone West African states.
While Maimbo represents the technocrat’s choice, with his reformist zeal, clarity of purpose and World Bank pedigree, his pitch may appeal to donors and non-regional shareholders hungry for governance reforms and greater operational efficiency.
Tah’s strong support for MSMEs and domestic capital mobilisation is likely to find resonance among smaller African economies. His economic diplomacy at BADEA gives him leverage among Arab and Sahelian nations.
Though the least visible internationally, Chad’s Tolli, may find appeal as a consensus candidate from Central Africa. His central banking experience could be valuable in steering the AfDB through global financial uncertainty.
As Africa confronts climate shocks, debt distress, joblessness and a scramble for its natural resources, the choice of who leads its premier development institution is more important than ever.
The incoming president will shape not only the bank’s policy direction but also Africa’s economic architecture in an increasingly fractured global order. Come May 29, the continent, and the world, will be watching.
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