John Campbell

Africa in Transition

Campbell tracks political and security developments across sub-Saharan Africa.

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Nigeria is Officially “Africa’s Largest Economy”

by John Campbell
April 7, 2014

Trucks are seen parked around an automobile workshop overlooking the Lagos business district at the Orile-Iganmu in Lagos August 29, 2013. (Akintunde Akinleye/Courtesy Reuters) Trucks are seen parked around an automobile workshop overlooking the Lagos business district at the Orile-Iganmu in Lagos August 29, 2013. (Akintunde Akinleye/Courtesy Reuters)

On April 6, Nigeria’s National Bureau of Statistics announced that after “rebasing,” Nigeria’s Gross Domestic Product (GDP) almost doubled to U.S. $509.9 billion. That figure is dramatically larger than South Africa’s 2013 GDP of $370.3 billion, and bestows on Nigeria the bragging rights of being the largest economy in Africa.

However, as Premium Times notes, South Africa’s GDP numbers are three times larger than Nigeria’s on a per capita basis. South Africa has a diverse, modern economy, while Nigeria remains heavily dependent on oil, despite a proliferation of cell phones and other telecommunication technologies, and a large and dynamic film industry. Further, World Bank president Jim Yong Kim included Nigeria with India, China, Bangladesh, and the Democratic Republic of the Congo as the countries with the largest number of people living in “extreme poverty,” defined as less than $1.25 per day. He went on to say that if you add to those five countries Indonesia, Pakistan, Tanzania, Ethiopia, and Kenya, those ten countries together account for 80 percent of the world’s total “extreme poor.”

According to the Premium Times, many economists believe that 70 percent of Nigeria’s population lives in “extreme poverty.” “Rebasing” does nothing to change this reality.

In light of work by Morten Jerven and others on the limitations of African statistics, it is uncertain whether Nigeria’s new GDP statistics describe economic reality.

This announcement is a matter of politics, not economics.  The claim of being Africa’s largest economy could bolster Nigeria’s chances of joining the G-20; at present, South Africa is the only African country in the club. But, if Nigeria joins, does South Africa leave?  It might also strengthen Nigeria’s claim to a permanent seat on the UN Security Council, if and when Security Council enlargement becomes anything more than a hypothetical question. And what about the BRICS (the grouping of Brazil, Russia, India, China and South Africa)?  South Africa’s membership was predicated on being Africa’s “largest economy.” Will Nigeria displace South Africa, or join South Africa?

It has been a rough past few weeks for Nigeria, with Boko Haram attacks at Giwa Barracks (Maiduguri) and within the headquarters of the State Security Service in Abuja. Violence involving “Fulani herdsmen” continues, and politics looking toward the scheduled 2015 elections are in turmoil. It is widely expected that President Goodluck Jonathan will seek re-election, though he has still made no announcement of his intentions. Presuming he does, he and his Peoples’ Democratic Party will almost certainly claim credit for Nigeria’s economic growth—if not for the remaining poverty of most of its citizens.

Post a Comment 3 Comments

  • Posted by Kingsley Omose

    Would you rather prefer that Nigeria continues to use GDP figures that are 24 years old, and why have you not made reference to IMF, AFC and World Bank role in verifying the rebasing process before it was released? Either way Nigeria presses on despite the tendency of some to see only negatives regarding her progress.

  • Posted by Femi

    Pls don’t conflate the GDP rebasing with politics. This is a de facto economic reality. The Chinese have a huge population and also lots of poor people but they are the 2nd largest world economy and soon will eclipse the USA. The only sad realty is that US strategic economic and policy actors have deliberately shunned nigeria and made this very important country turn eastward to the Chinese. Please let it sink in . This is Africa’s biggest consumer market .

  • Posted by Chike

    Most of the sectors that recorded impressive growth have limited government involvement. Nollywood is thriving IN SPITE of the Nigerian government, not because of anything the Nigerian government has done and the government wisely withdrew from participating in the Telecommunications sector.

    So in Nigeria (as in most African nations), government IS THE PROBLEM, not the solution to the problem.

    (The oil & gas sector & manufacturing (which require key inputs from government) had relatively weak growth.)

    The tax to GDP ratio is 12%, but this will be very difficult to increase – how do you tax a people when they generate their own electricity, pump their own water, put their children (at great cost) through private schools, pay for their own healthcare and pay for their security?

    Once again, Okonjo-Iweala appears aloof. It appears that she lacks the capacity to improve the lives of Nigerians, just reel out another endless list of positive statistics (about as useful as Stalin’s “tractor production figures”).

    Nigeria’s problems still remain and the failure of Western-educated technocrats to address these problems will increasingly be seen as a failure of a Western-oriented model of development. People don’t have infinite patience.

    According to Gallup, only 9% of Nigerians have steady jobs (that figure is even less than that for Congo DRC). This should make us EXTREMELY worried.

    Nigerians will pine for a Chavez-style populist in future – and trust me, they will come.

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