Stephen Hayes, president of the Washington-based Corporate Council on Africa, has written a thoughtful column on Nigeria’s widely anticipated announcement that it has overtaken South Africa as Africa’s largest economy.
Such an announcement, he observes, should be no surprise, given Nigeria’s population (nearly four times the size of South Africa’s) and that its markets are more open to new investment than South Africa’s. He notes growing Chinese and South African investment in Nigeria, as well as that from some large American companies. Such an announcement would enhance Nigerian pride and be good domestic politics for the Jonathan administration, which faces national elections as early as December 2014.
Hayes goes on to analyze some of the brakes on Nigerian economic development: critically inadequate power capacity, extreme poverty, the division between a richer south and a poorer north, and the threat to stability posed by Boko Haram, a violent, radical Muslim movement based in the northeast, and other various militant movements around the country.
He concludes that what matters is not which country has the largest economy in Africa, but rather how the economy benefits the whole of its citizens. He closes with the observation, “as Nigeria goes, so too will West Africa.”
Amen to Hayes’ conclusions.
Is Nigeria’s economy in fact bigger than South Africa’s? In his book Poor Numbers, Morten Jerven casts doubt on African national statistics repackaged by the international financial institutions that would be the basis for Nigeria’s claim. Jerven gives comparatively high marks to South African statistics, and low marks to Nigeria’s statistics. But, as Hayes has observed, the question of which is bigger really doesn’t much matter beyond bragging rights.
The Corporate Council on Africa is a non-profit, membership organization that promotes business and investment between the United States and Africa. Its membership includes 160 companies, which they say together constitutes about 85 percent of total U.S. private sector investment in Africa.