Nigeria, the most populous black nation in the world, is now the largest economy in Africa, courtesy of the rebasing of the country’s Gross Domestic Product (GDP).
By this development, South Africa, which hitherto was the leading economy in the continent, now trails behind Nigeria.
Although officials statistics to this effect is expected to be released today (Sunday) by the National Bureau of Statistics (NBS), experts and financial analysts have already projected the likely size of Nigeria’s economy on rebasing.
An emerging markets focused investment banking firm, Renaissance Capital (Rencap), whose team of analysts was in Abuja late last year, predicted that Nigeria would in 2014 lead the continent at the expense of South Africa.
“We are revising up our estimate of Nigeria’s GDP by 53 percent. The NBS has nearly completed its work, and our new estimate is that 45 percent to 60 percent uplift is likely, and we are taking 53 percent as the mid-point figure. We expect the data in January,” the company said.
In its research report released in December 2013, Renaissance Capital analysts, led by Charles Robertson, its global chief economist and head of macro strategy, said, “This means Nigeria, at $405 billion (GDP) in 2013 would be the largest economy in Africa, ahead of South Africa at around $370 billion.”
According to the report, other impacts of the rebasing include the possible reduction of growth rates to between five and six percent from six to seven percent, and an increase in GDP per capita to $2,400 from around $1,700; in essence moving Nigeria into middle income economy territory.
The company also gave projections of some sectors to be impacted by the rebasing.
“Sectors that may show the biggest upward revision range from Nollywood to IT and telecoms, while we think agriculture will shrink from around 40 percent of GDP to 25 – 30 percent of GDP,” Rencap added.
However, some analysts said that although the GDP is a good proxy measurement, it does not necessarily include economic development, which is better measured by per capita GDP. In the political economic context, the more powerful nations in the world are those which have larger per capita income.
Fortunately, Nigeria’s per capita income has improved recently to $2,800 as at December 2013, but is still a far cry from that of South Africa at $11,500 and below that of India at $4,000.
Also, while Nigeria is targeting 40,000 megawatts of power generation in 2020, South Africa produces around 240,300 gigawatt-hours of electricity annually, most of which are consumed domestically while about 12,000 gigawatt-hour are exported to neighbouring countries.
Nigeria’s emergence as a leading economy in the continent is coming on the heels of the coinage of a new acronym, MINT, referring to the economies of Mexico, Indonesia, Nigeria and Turkey, which have the best chances of joining the BRIC in the top 15 largest economies in the world come 2050.
The MINT countries are expected to be the new focus of the world attention especially now that the economies of the BRIC, comprising Brazil, Russia, India and China seem to be crumbling. The challenges posed by these new developments are so enormous as to make the country’s preparation look like a child’s play.