NIGERIA'S NEW GDP: NIGERIA'S GAIN, SOUTH AFRICA'S LOSS
On the 6th of April 2014, millions of South Africans were shocked to say the least as the Nigerian government after long assessment of the economy with world bank announced the rebasing of its economy, establishing Nigeria's GDP as the biggest in Africa. South Africa had been at the fore front of GDP ladder and biggest economy in Africa for a long time and their reaction to the announcement was quite normal and expected as nobody enjoys being overtaken by his rival. Their reaction should tell Americans of what awaits them in the future when Chinese economy will surpass theirs which has been forecasted so many times.
The effect of psychological blow and pain this new GDP announcement had done to the South Africans may not manifest at the moment but it may show up anytime soon in form of xenophobia. They are sneering at Nigeria's accent to the top of African economy which before now, was seen as birth right position of South Africa by many South Africans. The soreness of change in GDP of both countries was so acrid in the mouth of South Africans that the South African's foreign ministry's spokesman in Pretoria Clayson Monyela took to twitter where he posited 'Ok, let's explain some numbers here. After all the lights are on in SA, the banking sector & infrastructure is world class.' He wrote in apparent mockery of Nigeria's infrastructural decay but 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. As expected, they pointed to the considerable disparity in GDP per capita income of both countries not minding that Nigeria's estimated economy of $510 billion which is $163 billion larger than South Africa's has population of about 170 million.
Razia Khan, chief economist for Africa at Standard Charted said that looking at South African trade with the rest of the world relative to Nigeria's, it doesn't quite suggest the differences are as great as GDP now suggest especially looking at import bills. The South Africans are viewing this new statistics from all angles looking for default in the new GDP which is normal for a displaced contender and this will continue for a long time to come until Nigeria knocks all their economic superiority to the base. From Gross Domestic Product (GDP) to Per Capita Income (PCI) and to balance of trade. The most interesting part of Nigeria's new economic data suggest that its economy is much more diversified than was presumed with a larger manufacturing sector, services making up the largest portion of the GDP while natural resources mainly oil is down to 14 percent.
But non of these statistics are as disturbing to South Africans as the huge potential of Nigerian economy to widen the gap between the two economies. They can barely grapple with the reality that with less than 4000 mega watts of electricity, 'decayed' infrastructure, security problem, corruption and many more myriad of problems as they have pointed out, Nigeria still overtook them, then they will be in real trouble should Nigeria be sober towards its economic development and dominance. Diplomatic relationship between South Africa and Nigeria has deteriorated under both Presidents Jonathan and Zuma which made South Africans' interpretation of Nigeria's new economic dominance spleenful. In recent years, antagonistic attitudes of South Africans towards Nigerian nation shows their discomfort at Nigeria's apparent dominance in Africa. In the past, Nigeria dominated mainly in politics and international relations while South Africa dictated the pace of Africa's economy but Nigerian economic growth is discomforting South Africa's only leverage over other African countries with other regions of Africa waking up from slumber.
South Africa has been an investment destination for direct foreign investment (FDI) in Africa but another recent statistics proved that Nigeria has also overtaken them in that angle. With better justice system, rule of law and relative peace and security, one would expect South Africa to remain investment destination in Africa but with Nigeria's population, location and returns to investment to companies like MTN, Shoprite, Multi choice etc who are incidentally South African companies makes Nigeria more attractive to investors. Despite its roaring growth in recent years and now with bigger GDP, Nigeria still trails South Africa in basic infrastructure, power and roads necessary to lift its people out of poverty. Its mobile telephone network is one of the least reliable in Africa, internet quality is poor, roads are potholed and its ports and airports clogged by bad infrastructure and obstructive officials. All these drawbacks have collectively checkmated Nigeria to 26th economy in the world when it should have been in top twenty by now.
Many Nigerians are expectedly not happy with the new GDP as they believe the new status has not reflected in their lives believing its only the rich who are benefiting from Nigeria's economic expansion. Their views were not spurious as World Bank recently rated Nigeria as one of the top five countries with highest concentration of poor people on earth along side China, India, Bangladesh and Democratic Republic of Congo. With privatization of power sector in Nigeria, it is expected to drive the growth masses so desire and Nigeria's economy will start growing at micro level having been growing at macro economic pedestal producing the richest African man and woman over the years without affecting majority of the population.
Written By Obi Ebuka Onochie