Nigeria’s ambitious target of becoming a $1 trillion economy by 2030 is facing an impossible reality. To hit the government’s four-year deadline, the current $291 billion economy would have to more than triple in dollar terms, requiring an impossible 28 percent annual growth rate. BusinessDay’s analysis shows that if Nigeria stays on its current path of 4 percent growth, it will take exactly 14 years to cross the finish line in 2040.
Dollar GDP is tethered to three moving parts: real economic output, domestic prices, and the exchange rate. While inflation can inflate nominal GDP on paper, naira depreciation can erase much of that increase when measured in dollars. For Nigeria, the distinction matters. A larger economy on paper is not necessarily a more productive or prosperous economy. Sustainable expansion comes from producing more goods and services, raising productivity and expanding productive capacity. The arithmetic becomes clearer when tested against
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