Counting the Cost

Nigeria: Big economy, big problems

As Nigeria hosts the World Economic Forum on Africa, we examine how the country can confront its many challenges.

Last updated: 10 May 2014 09:31
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Nigeria, Africa's most populous nation, is now also the largest economy on the continent. Its economy is worth $510bn, but Nigeria has some big problems to contend with.

The country is the world's eighth-largest oil exporter, and almost 90 percent of its export earnings are tied to oil. Sixty percent of the population lives in extreme poverty, youth unemployment is close to 80 percent, and on top of that there is the almost daily violence in the north, where rebel group Boko Haram is fighting for a state governed by sharia law. 
There are chronic power shortages, which can increase the cost of doing business in the country by up to 40 percent. The entire national grid only delivers as much electricity as Qatar, which is not nearly as big or populous a country. And for a country with great oil wealth, there is the mysterious issue of falling oil revenues. This is the case of Lamido Sanusi, the central bank governor, who was suspended after blowing the whistle on a $20bn hole in the accounts of the state oil company.
So what is needed to achieve progress? And does Nigeria have a truly strong economy?

On Counting the Cost we discuss these issues with Hendrik du Toit, the CEO of Investec Asset Management.

Ethiopia's dam

Ethiopia plans to build Africa's biggest dam. It will produce 6,000 megawatts of electricity once it is completed, at a cost of $4bn. Ethiopia plans to pay the cost by itself.

The dam is part of a massive public spending programme on power, roads and railways in one of Africa's fastest-growing economies. For much of the past decade the Ethiopian economy has grown by more than 10 percent a year, attracting investors from across the globe. But that was not the case this year, when the economy has shown signs of a slowdown.

The government recently declared that economic growth has dropped to 9.7 percent from an earlier forecast of 11 percent. This is partly blamed on Ethiopia's decision to fund the dam itself. Although analysts believe the Great Renaissance Dam project could stifle economic growth, the government insists that the project will have benefits beyond Ethiopia.

Al Jazeera's Mohammed Adow reports from the capital, Addis Ababa.

Alibaba: Chinese e-commerce giant

Alibaba is the online powerhouse that makes more money than Amazon and eBay combined. Outside of China, few people have heard of it. But within the country, Alibaba is the dominant online shopping portal.

The company had a humble beginning. It was founded by Jack Ma, 15 years ago, in a one-room apartment. Today, Alibaba controls 45 percent of Chinese e-commerce. It has generated revenues of more than $6.5bn in the nine months to the end of December, making a net profit of just under $3bn.

Now the Chinese e-commerce giant is planning to go public in the United States. It has filed for an initial public offering that analysts expect will raise between $15-20bn, which could make it bigger than Facebook's IPO. Alibaba's total value has been estimated at $200bn.

Al Jazeera's Adrian Brown reports on the background behind China's undisputed e-commerce king. 

Watch each week at the following times GMT: Friday: 2230; Saturday: 0930; Sunday: 0330; Monday: 1630. Click here for more Counting the Cost.   

Follow Kamahl Santamaria @KamahlAJE and business editor Abid Ali @abidoliverali.


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