Africa’s most populated country now also has its biggest economy, after Nigeria changed what is included in its GDP calculation. Figures before the change predicted Nigeria’s GDP was approximately $257.9bn, but the new calculation has almost doubled that to $509.9bn.
South Africa’s GDP was $370.3bn at the end of 2013. Most countries change what is included in GDP calculations every few years to reflect changing technologies or outputs, but Nigeria had not done so since 1990.
The new figure may liven up the fight for foreign capital between Nigeria and South Africa
The new calculation includes several sectors for the first time. Telecoms, information technology, airlines, online sales and film production are now all part of Nigeria’s GDP figures, in a move that underlines Nigeria’s commitment to more accurately track statistics, according to statistics chief Yemi Kale.
Speaking to reporters in Abuja, Kale also promised that future rebasing would occur every five years, in line with the global norm.
Kale said that the jump in the official GDP figure makes Nigeria the 26th largest economy in the world, a leap up from 33rd. It will undoubtedly fuel the intense rivalry between South Africa and Nigeria.
South Africa represents the African continent in the G20 and in the BRICS group of emerging economies but now Nigeria may question why it isn’t part of those groups too.
Analysts have criticised the figures; speaking to Reuters, Nigerian financial analyst Bismarck Rewane called the revisions a “vanity”. Rewane admitted the calculation was more accurate but cautioned against the benefits of rebasing, saying that it would mean very little for Nigeria’s population.
Economists have also suggested that Nigeria’s economy is chronically underperforming. Although the country has three times the population of South Africa, on a per-capita basis the South African economy remains stronger.
Despite the fact that GDP per capita in Nigeria rose to $2,688 last year from an estimated $1,437 in 2012, poverty and inequality have continued to widen. Infrastructure remains poor and the country has one of Africa’s most unreliable telecommunications and internet networks.
The new calculation may have one immediate benefit for Nigeria: raising the country’s profile. The new figure may liven up the fight for foreign capital between Nigeria and South Africa.
Although the country has a spotty reputation, with many still believing that the systems of governance are corrupt, Nigeria is keen to attract foreign investment to help renovate its poor transport, power and communications infrastructure.
