Nigeria has pipped South Africa as the largest economy in Africa in terms of GDP figures as per the recently published report of the National Bureau of Statistics carried out after the rebasing exercise of the Nigerian economy.
As per the released report, the Nigerian GDP for 2013 stands at about US$ 509.9 billion or about 80.3 trillion naira. In comparison, the South African GDP for the same time-span has been tabulated at about US$ 370.3 billion which has effectively ensured the supplanting of the South African economy as the largest in the African continent by the West African nation.
The Need for Rebasing
The rebasing exercise was primarily carried out in order to incorporate the industrial changes that have been wrought in the nation. Rebasing essentially involves the substitution of the base year upon which GDP calculations were made with a year that encompasses the more recent economic and industrial activities.
The base year for calculating the Nigerian GDP was 1990 which has now been substituted to 2010. The rebasing exercise has also taken into account 13 new industrial sectors which were previously left unaccounted for in the tabulation of the Nigerian GDP. Post the completion of the rebasing exercise thus, the number of industrial sectors taken into account in the Nigerian economy has gone up to 46 from 33. These newer industrial sectors include telecommunications, IT, aviation, e-commerce, movies and music production.
Problems post Rebasing
Despite the outwardly seeping success of the rebasing exercise of the Nigerian economy, there are a few glaring problematic areas that have gained prominence post the rebasing exercise.
Basically, there are three major ways by which GDP of a nation can be calculated which can be outlined as under:
- Summing up the total expenditure figure by the various important sectors in an economy including the difference between the export and import figures of the economy.
- Summing up the total revenue earned by the factors of production in the economy where factors of production include land, labour, capital and entrepreneurs.
- Subtract the revenue earned by selling goods and the money spent to produce the goods and the difference of which will give the GDP statistics.
While comparison of GDP figures between Nigeria and South Africa definitely puts the former ahead, in terms of population and the resultant per capita distribution of the GDP puts the latter firmly on top of the latter. This is because the present population of Nigeria is about 170 million which is thrice the population count of South Africa which accounts for a greater GDP distribution per person in the nation. Moreover according to leading Nigerian economic analysts, the poverty count within Nigeria still persists leaving the rise in GDP as a mere theoretical chart of development without accounting for more realistic picture.
Leading Nigerian economic analyst, Mr. Bismarck Rewane pinpointed this to the BBC, summarising the situation as, “The Nigerian population is not better off tomorrow because of that announcement. It doesn’t put more money in the bank, more food in their stomach. It changes nothing.”
Thus it does remains to be seen whether the Nigerian economy can brace itself with these new revealing statistics whilst enabling a greater deal of financial mobility for its people, which then would indeed make for the biggest economic success story for not just Nigeria, but for the entirety of Africa.