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
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.