As Nigeria officially becomes Africa’s biggest economy, we take a look at how it took over South Africa.
ABUJA — This week, Nigeria added 89% to its GDP achieving a value of $510 billion; but there is a concern that this has not made difference for the average Nigerian citizen.
The GDP rise followed a ‘rebasing’ process of calculating GDP, last completed 24 years ago. It is usually carried out every five years by wealthy countries. This revision provides a clearer picture of Nigeria’s size including a range of contributors previously small or non-existent. One of these is telecoms currently catering for 120 million mobile phone subscribers. The Nollywood film industry is another major addition that has contributed $600 million to the GDP and has provided employment to up to 1 million people, the second largest employer after agriculture. Other industries such as banking and airlines have been fast growing in recent years.
The economy has been growing at a rate of 7% over the past decade. There has been a steady growth of foreigners investing in Nigerian stocks. After Johannesburg, Lagos is the biggest market in Africa. Finance Minister Ngozi Iknojo-Iweala said that new data makes Nigeria the 26th largest economy in the world.
South Africa was the previous African economic leader worth $370 billion but despite falling short of Nigeria, it still maintains a higher GDP per head of $7,336. Nigeria’s is only $2,700 with 70% of its population living in poverty. The massive population of $170million has contributed to the GDP growth and the UNI estimates 440 million Nigerians by 2050.
Despite this growth, the UN Humans Development Index ranks Nigeria 153rd out of 187 countries due to major issues of unemployment and increasing poverty. Where South Africa is rich in infrastructure, Nigeria is lacking in development with traffic congestion and constant power cuts.
This sudden growth implies that we do not have an accurate picture of sub-Saharan African economies, which have been growing three times faster than suggested previously. An example being Ghana, which after rebasing in 2010 had an increase of 60% in its GDP. Nevertheless, GDP clearly does not measure a country’s economic strength and health. “Nothing really has changed, the economic problems such as poverty and inequality and a poorly-functioning state remain,” says economist Diane Coyle. We can only hope that Nigeria will use this GDP growth for the development of its country.
— Randi Karangizi, Correspondent (Africa)
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