$1trn economy target meaningless without higher incomes, prod...

Nigeria’s ambition to build a $1 trillion economy by 2030 risks becoming little more than a statistical milestone unless it is driven by sustained improvements in productivity, employment and household incomes rather than exchange rate gains, according to economic analyst and private equity investor, Frank Nnamka.

In an economic analysis, Nnamka argued that the dollar value of an economy is determined not only by the quantity of goods and services produced but also by movements in the exchange rate, warning that a stronger naira could temporarily inflate Nigeria’s Gross Domestic Product (GDP) in dollar terms without making Nigerians materially wealthier.

He explained that while Nigeria’s economy expanded by about 4 per cent in real terms in 2025, its GDP measured in US dollars increased by approximately 15 per cent, rising from about $252 billion to $291 billion, largely because of exchange rate appreciation and inflation rather than a corresponding increase in productive output.

According to him, this distinction is critical as the Federal Government pursues its long-term economic transformation agenda.

“Nigeria can reach a trillion dollars without its people getting much richer. And it can make its people much richer without ever reaching a trillion dollars,” he stated.

Nnamka noted that for Nigeria to grow from roughly $291 billion to $1 trillion by 2030, the economy would need to expand in dollar terms by almost 28 per cent annually over the next five years.

He argued that such growth would be difficult to achieve through real economic expansion alone, suggesting that any rapid increase in the headline GDP figure would likely depend heavily on exchange rate appreciation and inflation rather than substantial increases in national output.

“The quickest way to move the headline number is to move the currency, not the economy,” he said.

He warned that focusing excessively on the dollar valuation of GDP could encourage policymakers to prioritise exchange rate management over structural reforms capable of expanding production, investment and employment.

According to him, countries that genuinely transformed into trillion-dollar economies, including India and Indonesia, did so through decades of sustained real GDP growth averaging between five and seven per cent annually, supported by industrial expansion, rising productivity and increased investment.

He stressed that stronger currencies historically emerged as a consequence of economic strength rather than as the primary driver of growth.

Nnamka argued that Nigeria should therefore measure its progress using indicators that directly reflect improvements in living standards, including stronger real GDP growth, increased productive employment, higher manufacturing output, greater agricultural productivity and rising business profitability.

He also advised investors to distinguish between returns generated by exchange rate movements and those driven by genuine improvements in corporate earnings and productivity.

According to him, gains arising from currency appreciation can quickly disappear when exchange rates weaken, whereas wealth created through stronger business performance tends to be more sustainable.

He maintained that achieving a $1 trillion economy remains an important national aspiration but insisted that the credibility of the target depends on the quality of the growth underpinning it.

“A trillion-dollar economy is a worthy ambition, but the number itself is not the achievement. The economy underneath it is,” he said.

He concluded that Nigeria’s long-term prosperity would depend less on achieving a symbolic GDP milestone and more on building a productive economy capable of generating broad-based wealth, quality jobs and sustainable improvements in living standards.