Economic and financial analysts have continued to examine the various economic indicators of Nigeria and South Africa, after a rebased Gross Domestic Product of the West African nation jumped to $510bn.
Most of Nigeria’s 170 million people live below the poverty line.
Nigerians said that although the country’s 2013 rebased GDP of nearly $510bn had made it one and half times the size of South Africa’s, most people in the West African nation were still living below the poverty line.
According to a Reuters report, political and economic leaders hope the statistical revamp will help them to “sell” Africa’s most populous market to investors, including mall-builders, manufacturers and retailers offering everything from processed foods and household appliances to luxury cars.
But development economists argue that their attention should be on improving the health, education and incomes of ordinary Nigerians, many of whom struggle to feed their families.
In 2013, the Economist Intelligence Unit rated Nigeria the worst place for a child to be born out of 80 countries surveyed, Reuters reported.
“Really what matters in the end is per capita, how well our individuals are doing,” World Bank chief Africa economist Francisco Ferreira said after the statistical change in Abuja.
In GDP per capita terms, Nigeria is looking healthier than before rebasing: per capita GDP was $2,688 last year, from an estimated $1,437 in 2012.
The Chief Executive Officer, Eczellon Capital, a Nigeria-based investment bank, Mr. Diekola Onaolapo, said for Nigeria to solidify its position as the real economic giant of Africa, it needed to continue reforms that would facilitate real development.
According to him, the reforms in the economy, especially in the power sector will further encourage production and the economy is expected to continue on its growth trajectory.
He said, “To compare the economy of South Africa with Nigeria, other economic parameters will be considered. For instance, Nigeria may have higher GDP, but due to its significantly higher population currently estimated at 170million, Nigeria’s GDP per capita, even at the rebased GDP, is significantly lower at $2,688 than that of South Africa, at over $6,000.00.”
He added, “For instance, per capita GDP may have improved, but how about the income distribution. Also, key factors of development include measures of improvement in the standard of living in the country which will be facilitated through improved infrastructure must be focused on.”
On a per capita basis, Botswana, Mauritius and Seychelles are among Africa’s top five richest states. None has a population of more than two million, so they are admired but cannot claim heavyweight status when it comes to competing with other African countries for the attention of foreign investors.
Nigeria’s potential is predicated on its large population, according to a Reuters report.
Economist Jim O’Neill notably included it in his MINT group of countries, alongside Mexico, Indonesia and Turkey, which he thinks will join the BRICs (Brazil, India, Russia, China) he named as the emerging economies shaping the world’s future.
All have large, swelling populations, with a demographic bulge around the soon-to-be-most-productive younger generations.
The Chief Executive Officer, Nigeria Stock Exchange, Mr. Escar Onyema said, “Size matters. Size means you will be able to do … projects you would not have considered in smaller economies.”
For retailers targeting customers at the bottom of the socioeconomic pyramid, a national income spread around more households – lower GDP per capita, in other words – might actually be a good thing, many economists argue.
But Nigeria’s growing inequalities add to “political risks, as a result of perceived marginalisation,” said Razia Khan, chief Africa economist at Standard Chartered Bank.
Unless something is done to lift the impoverished masses, the risk of social unrest, already being reaped in a bloody insurgency in the destitute northeast and oil theft in the south, will grow.
She said, “The pressure on the authorities to create some sort of social safety net in response will be significant.”
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