NIGERIA SET TO BECOME AFRICA’S BIGGEST ECONOMY

Posted by Olaniyi Abodedele on Thursday, March 6, 2014 Under: News Stories



Pretoria, South Africa - Nigeria is set to become the biggest economy in Africa, as stated by eye witness news.

In the coming month, Nigeria will finally complete a rebasing of its gross domestic product (GDP) data, which is likely to see Africa’s top oil-producing nation dethrone South Africa and become the continent’s largest economy in terms of its GDP size. In 2012, the World Bank estimated Nigeria’s economic output at $263bn and South Africa’s at $384bn. According to projections by economists, however, this rebasing exercise may see Nigeria’s GDP increase to somewhere between $384bn and $424bn, making it the 28th biggest economy in the world, and Africa’s new economic powerhouse.

This recalculation, called “rebasing,” is an adjustment that takes into account changes in price and the weight of certain economic sectors, among other factors, and creates a new base year from which these are calculated. Most countries go through the process every five or 10 years to keep the figures up to date. Nigeria’s last rebasing was in 1990.

“When you are computing GDP, you are trying to know the changes that happen in the economy,” Dr. Yemi Kale, Nigeria’s statistician general, told reporters after the original plan to rebase was announced. “Between 1990 and now so many things have changed, some positive and some negative.”

For example, the agricultural sector in the 1990s accounted for about 40 percent of the country’s GDP. But information technology, telecoms and even the "Nollywood" film industry are new segments that barely existed back then, but currently account for a large chunk of the nation’s earnings. Agriculture today accounts for a little over a quarter.

According to Business day live of 31st January 2014, it stated that over the past decade, Nigeria has boasted superior economic growth. The West African nation, with a population of more than 170-million people — three times South Africa’s 51-million — has outpaced South Africa’s sluggish growth by expanding by an average of 7% a year, compared with South Africa’s meagre 3% average.

A testimony to the massive growth of the Nigerian economy is the fact that from 2012-2013, seven Nigerian branches of South African supermarket group Shoprite sold more of the bubbly (champagne) than its 195 South African shops combined, a sign of Nigeria’s effervescent economy as well as the tastes of its ostentatiously wealthy elite, as stated in an article by Erin Conway-Smith on Global post website of January 28 2014.

“Perhaps the upside for Nigeria is that it will become too important to ignore,” said Samir Gadio, an emerging markets strategist at Standard Bank, from Lagos. But the country is still “significantly underdeveloped,” thanks to problems with basic infrastructure such as roads and electricity, plus high rates of income inequality.

“This negative perception will not dissipate just because of the revision in aggregate GDP,” he said, adding that the per capita rate, i.e. how much the average Nigerian makes, “will continue to trail that of South Africa over the next decades” stated by the International Business Times by Kathleen Caulderwood on February 04 2014



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