Nigeria has overtaken South Africa as Africa’s largest economy after a rebasing calculation almost doubled its gross domestic product to more than $500bn, data from the statistics office showed.
GDP for 2013 in Africa’s top oil producer was 80.22 trillion naira, or $509.9bn, the Nigeria Bureau of Statistics said on Sunday, up from the 42.3 trillion estimated before the rebasing, according to the Reuters news agency.
Most governments overhaul GDP calculations every few years to reflect changes in output, but Nigeria had not done so since 1990, so sectors such as e-commerce, mobile phones and its prolific “Nollywood” film industry – now worth 1.4 percent of GDP, Kale said – had to be factored in to give a better picture.
Nigeria, Africa’s most populous country with 170 million people, has been growing as an investment destination owing to the size of its consumer market and growing capital markets.
‘Exercise in vanity’
Analysts said the recalculated GDP would raise Nigeria’s profile, but change little on the ground.
“Is the money in your bank account more on Sunday than it was on Saturday? If you had no job yesterday, are you going to have a job today?” asked Bismarck Rewane, CEO of Lagos-based consultancy Financial Derivatives.
“If the answer to those questions is ‘no’, then this is an exercise in vanity,” he added, though he said the new figure was more accurate.
Many Nigerians shrugged off the GDP news.
“I’m not really impressed. I don’t feel it in my pocket… It’s not the masses who are rich,” said Richard Babs-Jonah, 47, a small farmer, expressing the common view that Nigeria’s economy is rigged in favour of a handful of well-connected oligarchs.
“Those controlling the economy, those with government contracts, get all the money.”
Nigeria vs South Africa
Nigeria’s taking the title of Africa’s biggest economy will fuel a longstanding rivalry with South Africa.
South Africa currently represents Africa at the G20, as well as in the “BRICS” group of the most powerful emerging economies, which also includes Brazil, Russia, India and China.
Nigeria may argue that it should join those clubs too.
It will also enliven competition for investor capital at a time when South Africa faces challenges such as striking workers and high current account and budget deficits.
Despite its roaring growth of recent years and now a bigger GDP, Nigeria still trails South Africa in basic infrastructure – power and roads – necessary to lift its people out of poverty.