By Aluta News
December 27, 2020
The World Bank has ranked Nigeria’s economy among the top 25 economies in the world in 2019.
This was made known in the bank’s latest update.
The economies were measured by their Gross Domestic Product (GDP). The GDP is an estimate of the total value of finished goods and services produced in a country’s borders during a specified period, usually a year. GDP is commonly used to estimate the size of a country’s economy.
In 2019, Nigeria became one of only three countries in the top 25, including Thailand, and Indonesia, that were not there in 2000. Nigeria leapt from 46th place all the way to 25th in 2019. The GDP, which stood at $69 billion in 2000, rose to $448 billion in 2019. The development establishes Nigeria as one of the fastest growing economies in the world.
The GDP is measured by different metrics including Nominal GDP in Current U.S. Dollars, Purchasing Power Parity (PPP) Adjusted GDP in Current International Dollars, GDP Growth, and GDP Per Capita, in Current U.S. Dollars.
Nominal GDP is the most basic and common way of measuring and comparing GDP between countries, using local prices and currencies converted into U.S. dollars using currency market exchange rates. The Purchasing Power Parity (PPP) is an alternative way of comparing nominal GDP between countries, taking into account the difference in cost of living between different the countries.
GDP Growth is the annual percent growth rate of nominal GDP in local prices and currencies, which estimates how fast a country’s economy is growing while the GDP Per Capita is nominal GDP divided by the number of people in a country. GDP per capita measures how much a country’s economy produces per person, rather than in total.
1. United States
The United States is ranked the number one economy in the world with a Nominal GDP of $21.43 trillion in 2019. The country’s 2019 PPP Adjusted GDP stood at $21.43 trillion while the 2019 GDP Growth was at 2.2%. Also, the 2019 Nominal GDP Per Capita stood at $65,298. The biggest contributor to the country’s GDP is the economy’s service sector which includes finance, real estate, insurance, professional and business services, and healthcare.
2. China
China has the world’s second largest nominal GDP and the largest in terms of PPP. The 2019 Nominal GDP stood at $14.34 trillion while the 2019 PPP Adjusted GDP was at $23.52 trillion. Also, the 2019 GDP Growth stood at 6.1% with the 2019 Nominal GDP Per Capita at $10,262. Chinese economy has consistently outpaced the U.S. on annual growth and is on track to become the largest economy in the world by nominal GDP in the years to come.
3. Japan
Japan is the third largest economy in the world as its GDP crossed the $5 trillion mark in 2019. Its 2019 Nominal GDP was at $5.08 trillion while its 2019 PPP Adjusted GDP was at $5.49 trillion. The 2019 GDP Growth stood at 0.7% while the 2019 Nominal GDP Per Capita stood at $40,247.
4. Germany
With a Nominal GDP of $3.86 trillion in 2019, Germany was fourth among world largest economies. The country’s 2019 PPP Adjusted GDP stood at $4.68 trillion while the 2019 GDP Growth was at 0.6%. Also, the 2019 Nominal GDP Per Capita was $46,4456. Germany, Europe’s largest economy, is a top exporter of vehicles, machinery, chemicals, and other manufactured goods, with a highly skilled workforce.
5. India
With a nominal GDP of $2.87 trillion in 2019, India is the fifth largest economy in the world. The Asian country’s 2019 PPP Adjusted GDP stood at $9.56 trillion while the 2019 GDP Growth was at 4.2%. The 2019 Nominal GDP Per Capita was at $2,100, making it the lowest among the top 25 economies in the world.
25. Nigeria
Nigeria’s economy was by far the largest in Africa in 2019. The nation’s 2019 Nominal GDP stood at $448.12 billion from the $398 billion in 2018 while the 2019 PPP Adjusted GDP was at $1.08 trillion. Also, the 2019 GDP Growth stood at 2.2% while the 2019 Nominal GDP Per Capita stood at $2,230.
President Muhammadu Buhari
Nigeria’s economy relies heavily on oil. The West African nation is the largest oil exporter on the continent and also has Africa’s largest reserves of natural gas. Other resource extraction industries, such as coal, tin, and other metal mining, are also important to the Nigerian economy. While oil dominates in terms of contribution to GDP and exports, between a fifth and a half of Nigerians work in agriculture, mostly small-scale subsistence agriculture.
President Muhammadu Buhari has severally committed to diversifying the economy through agriculture. His administration has also made several moves to encourage farming and make the agriculture sector attractive to potential investors.
2019 is the most recent annual data available for these countries and it doesn’t capture the devastating impact of the COVID-19 pandemic on economies across the world in 2020.
Although oil prices are now rebounding, they went as low as $10 at a time in 2020. Nigeria has been one of the hardest hit countries in the oil sector. The pandemic-induced lockdown in March through May also did not do the Nigerian economy any good.
These factors led to an economic recession in the third quarter of 2020 but officials have assured Nigerians that the economy would start to recover from the first quarter of 2021.