According to Michelle Faul an Associated
Press writer Nigeria's recalculated economy is worth
$510 billion, by far the biggest in Africa, officials announced Sunday using
long overdue revised data that gives the West African nation continental
bragging rights but does little for the 70 percent of its citizens living in
poverty. The new value of Nigeria's GDP adds previously uncounted
industries like telecommunications, information technology, music, airlines,
burgeoning online retail outlets and Nollywood film production that didn't
exist when the last GDP count was made in 1990. Then, there were 300,000
landlines. Today, Nigeria has 100 million cell phone users.
The new figures also will take account
of growth in agriculture and tourism that have flourished since democracy was
restored in 1999, ending decades of military dictatorship.
With one fell swoop, Nigeria knocked
out of the ring South Africa, whose GDP of $353 billion was previously counted
the biggest on the continent and which is the only African member of the G20.
"Nigeria's success is a reminder
that Africa is moving ahead despite its current challenges," said
investment manager Kevin Daly of UK-based Aberdeen Asset Management, which
invests in Africa. He pointed out that it is a Nigerian, billionaire Aliko
Dangote, who is building Africa's largest privately owned oil refinery.
Investors' attention will be drawn by the fact
that while oil remains the biggest source of government revenue, about 80
percent, oil production is declining while Nigeria's agriculture,
communications and service sectors are enjoying healthy growth.
Nigeria has been Africa's biggest
drawer of direct foreign investment despite myriad woes, from massive
corruption and oil thefts costing the country some $20 million a day to an
Islamic uprising in the northeast that has killed more than 1,200 people so far
this year, to a paralytic electricity supply that keeps businesses dependent on
diesel-run generators.
Finance Minister Ngozi Ikonjo-Iweala
told a news conference Sunday that the new data makes Nigeria the 26th largest
economy in the world and raises its per capita income to $2,688, making it No.
121 in the world, up from No. 135.
That is still feeble compared to South
Africa's $7,336 for its population of 48 million. South Africa, bedeviled by
mining strikes, violent protests over services and a lackluster performance
that has kept annual growth at around 3.5 percent, still has infrastructure
unrivaled on the continent, most notably a power sector that generates 10 times
more electricity than Nigeria.
Nigeria's revised figures will lower
its much-vaunted growth rate of 7 percent but also will decrease an already low
debt to GDP ratio of 21 percent, which should lower interest rates should the
government want to borrow more, economists said.
Ikonjo-Iweala blamed decades of
military rule for the delay in repositioning Nigeria's economy, but the country
is not alone. Ghana's economy jumped by 60 percent when it recalculated its
goods and services production in 2012, and Kenya and Zambia are considering the
same.
Ikonjo-Iweala has said that Nigeria's
economy needs to grow at about 10 percent to address massive poverty and youth
unemployment. Government statistics say unemployment increased from 12.7
percent in 2007 to 23.9 percent in 2011; the World Bank says unemployment among
young Nigerians stands at 38 percent but analysts say it is as high as 80
percent in many parts of the country.
Financial analyst Bismarck Rewane
called the revisions "a vanity. 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."
Nigerians took to social networks to
share their feelings. "So Nigeria has now supplanted South Africa as
Africa's largest economy. But I've not had light (electricity) for seven days,
so it means nothing to me," said one tweet.
Another commented: "Nigeria is
Africa's biggest economy - on paper. So technically, I'm rich in theory."
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