South Africa to lose African crown

A rebasing of Nigeria’s GDP could see Africa’s most populous country overtake South Africa as the continent’s biggest GDP contributor.

The rebasing could see Nigeria’s GDP shoot up by as much as 65%, hitting $432 billion.

According to the Nigerian National Bureau of Statistics (NBS), the process of “rebasing” involves replacing the present base year with a new or more recent price structure, to reflect structural changes in the economy

“This exercise will see the present base year move from 1990 to 2010, in the process taking into account new sectors of the economy that have sprung up over the last twenty three years,” the bureau said.

Figures run by Business Day Nigeria projected that the shift could see Nigeria’s GDP jump between 20% and 65% to a max of $432 billion – ahead of South Africa’s $384.3 billion economy (World Bank data).

The World Bank pegs Nigeria’s 2012 GDP at $262.5 billion, making it the 3rd largest economy by GDP, edged out by Egypt.

GDP of the top 10 African countries (measured in US$billion) – World Bank

Country 2009 2010 2011 2012
South Africa 283.977 363.240 401.802 384.312
Egypt 188,984 218,887 236,000 262,831
Nigeria 169,481 229,507 245,682 262,597
Algeria 137,211 161,207 199,070 205,788
Angola 75,492 82,470 104,115 114,147
Morocco 90,908 90,770 99,211 95,981
Libya 62,360 80.442* 36.874* 79.691*
Sudan 52,839 64,849 63,997 58,768
Tunisia 43,607 44,377 46,434 45,662
Ghana 25,978 32,174 39,564 40,710

*IMF Estimates

Impact on the numbers

According to Bloomberg, data from Renaissance Capital (RenCap) shows that recalculating the data may result in a slow down of Nigeria’s growth rate to between 5% and 6%.

South Africa’s economic growth for 2013 is expected to be 1.9% – down from initial projections of about 2.3%.

The new base isn’t particularly reflective of a better standard of living in the country, but rather gives greater weight to communications, entertainment and mining – some of the biggest sectors of Nigeria’s economy.

Statistician general of the NBS, Yemi Kale, reportedly stated that the bigger GDP figure “doesn’t mean we (Nigeria) are more economically well off than South Africa”.

Nigeria is a tough country to do business in, with a large portion of Nigeria’s population living in poverty, with the country known as one of the hardest hit by corruption and social unrest and violence.

According to RenCap, the new GDP figures would, on paper, boost Nigerian GDP per capita to as much as $2,400 from $1,555 before – but with a population of over 169 million people, the spread of Nigeria’s wealth is stretched thin.

South Africa’s GDP per capita is pegged at $7,508 amongst its population of 51 million people.

Nigeria’s NBS is expected to release the updated economic figures later this month.

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South Africa to lose African crown