Charts circulated by Reuters today (28 Aug) show the rebased Nigerian economy as much bigger than sluggish South Africa, and followed by Egypt, Algeria, Angola and Morocco. They also show Africa’s fastest-growing large economies over 2010-13, with oil-fuelled Ghana leading the pack with historic growth of 10.2% a year, followed by non-commodity driven Ethiopia (9.0%), Zambia (6.7%) and the rebased Nigeria at 6.4% a year.
Nigeria’s economic rebasing came in April, after they updated the sectors and weights of different parts of the economy. Countries are supposed to do it every 3 years, Nigeria last did it in 1990. This was The Economist’s comment in April: “The GDP revision is not mere trickery. It provides a truer picture of Nigeria’s size by giving due weight to the bits of the economy, such as telecoms, banking and the Nollywood film industry, that have been growing fast in recent years. Other countries perform similar statistical magic – Ghana, for example, added 60% to its economy in 2010.
“Its economy has been growing at an average rate of around 7% a year over the past decade. It is rich in resources, especially oil. It has energetic entrepreneurs and aspirations to be the tech hub of Africa, boasting startups such as Konga and Jumia, budding Nigerian Alibabas. In other industries it has giants such as Dangote Cement (see article), which plans to list in London—as a big oil firm, Seplat, did this week—and is likely to become part of the portfolio of many pension funds. Growing numbers of foreigners wanting to invest in Africa’s rise will buy Nigerian stocks; after Johannesburg, Lagos has the biggest, most liquid market in the region. Above all, Nigeria has lots of people: more than 170m of them”.
Most commentators at the time pointed out that the GDP revision did not mean more food in anyone’s mouth in Nigeria and numbers of unemployed are very high and the number of people in poverty has increased, despite the high annual growth rate. GDP per head is only $2,700 after the rebasing, South Africa’s is nearly 3 times as much. Nigeria’s infrastructure is extremely poor, including transport and power. They point to lack of development and the spiraling political uncertainty and The Economist added: “To absorb the millions of young people pouring into the labour market, Nigeria requires the sustained double-digit growth that China has shown to be possible.”
However, the clearest lesson, according to The Economist: “.. is for sluggish, complacent South Africa, which has long taken its status as the continent’s giant for granted. With Nelson Mandela dead, it looks ever less like a rainbow nation. The ruling African National Congress is tainted by corruption: President Jacob Zuma is trying to explain how the state spent $24m on his private home. Without economic and political reform, it will slip further behind.”
The figures in the chart come from the International Monetary Fund (IMF), Nigerian National Bureau of Statistics and analysis by McKinsey Global Institute.
