Rebasing to push Nigerian GDP closer to SA

[Naijaborn]

Originally Posted by I.M Boring

Kenya is developing very fast, especially infrastructure wise. I can tell it hurts you doesn't it?

So are many others on the continent, Mr.

[Tbite]

Originally Posted by Prythen

I mean, well, that's cool and all but, that's pretty obvious that one day, Nigeria would overcome SA in terms of GDP.
130 M people produce more than 50 M.

Nigeria's population is 167 Million but 40% are below the labour line (Most Nigerians are very young) and 20% are unemployed

So you have a labour market of 67 Million really

and of that labour market, most would be in the informal market or at least 40%.

[tallglassy]

Originally Posted by Naijaborn

So are many others on the continent, Mr.

Get over yourself

[popa1980]

Growth in Nigeria will NOT be "sudden". It is currently restrained by SEVERE infrastructural deficits especially power generation. These are not things that can be built overnight.
As the deificts get reduced, the price of power comes down, railroads get built, ports get expanded- you will see an upward growth especially in the industrial sector.

Agriculture is another thing that the Nigerian govt is still not taking as seriously as Ethiopia or Ghana.

[Tbite]

We will see about that

[Naijaborn]

Originally Posted by tallglassy

Get over yourself

mayn..........we have some strange peeps on this forum....

[Dhuks]

Seriously leave Kenya out of this.

[miky101]

Originally Posted by BUTEMBO21

I really resent this damn word.

From picture of fabrice!! Lemme guess your from Congo, and its all u been feed ur entire life??

[xJamaax]

Originally Posted by Prythen

Well, then, when they'll have a higher GDP than South Africa's, what will they do ?

They will become very important politically and economically on a global stage and of course in Africa.

[Prythen]

Okay.

Originally Posted by Tbite

Nigeria's population is 167 Million but 40% are below the labour line (Most Nigerians are very young) and 20% are unemployed

So you have a labour market of 67 Million really

and of that labour market, most would be in the informal market or at least 40%.

Of course, that's why it's expected to increase.

[miky101]

Originally Posted by Prythen

Okay.



Of course, that's why it's expected to increase.

lol like its population wasn't growing just as fast in the 80's or 90's?? population has nothing to do with growth if its not implemented well into the program. as a matter of fact steady growth and a rising population is recipe for economic decline..

china growing at 6% is just like its declining..

[A Darter]

“There’s more to life than GDP,” is a favourite refrain of left-leaning social commentators and environmental activists. But when it comes to geopolitics, there are few better ways of establishing dominance than by seeing whose is number one.

Nigeria plans to rebase its GDP calculations later this year, a move which insiders say will push the size of its economy up by 40%, bringing it close to South Africa’s.

The potential turnaround will add fuel to a longstanding contest between the two nations to be Africa’s undisputed leader, and eventually its voice at the United Nations, which periodically ignites rows between them.

By the end of this year, at least assuming oil prices don’t collapse, Nigeria and South Africa should be approaching par in dollar terms: $370-billion and $390-billion, respectively.

With Nigeria growing at 7% a year and South Africa at less than half that, Nigeria could be ahead in just a few years.

Unavoidable
Nigerians are hoping this will translate into more prestige on the world stage — as happened on a grander scale to China, when its GDP started dwarfing those of established world powers.

It will certainly wake investors up to the opportunities in Africa’s most populous country and biggest energy producer.

“The country becomes unavoidably on the radar for anyone looking at Africa opportunities,” said Fola Fagbule, Africa Finance Corporation vice-president for origination and coverage.

Nigeria has work to do if it wants to leverage this new profile.

In international eyes the nation remains a byword for corruption and sleaze — a perception reinforced by a recent $6.8-billion scandal over fuel subsidies.

South Africa is meanwhile seen as one of the few African destinations where the rule of law safeguards investments.

“I hope a larger GDP will increase pressure on government to do things right, to be more transparent,” said Fagbule. “More likely, we’ll see a lot of chest beating, bragging about how we are the giant of Africa — even though we do things terribly.”

Graft, diplomacy
Though governance is worsening in South Africa, it has a long way to go before it crosses places with Nigeria on the Transparency International corruption perceptions index.

South Africa has sunk 29 places in the gauge of perceived corruption since 2001, from 38th in the world to 64th last year.

But Nigeria was 143rd out of 183 places in 2011, and the sheer scale of its graft has led some analysts to ask whether government statistics on things like GDP can even be trusted.

“In Nigeria, [fuel subsidy] fraud of $6.8-billion can go on without anyone really noticing or minding or it impacting official GDP,” said Antony Goldman, head of PM consulting.

“It must have had a huge impact, and yet apparently you can’t find it in any of the data.”

Nigeria is also competing with a South Africa that has put a great deal of effort into being seen as champion for Africa and developing countries in things like trade talks — its membership in the Brics (emerging market group including Brazil, Russia, India and China) has helped boost that aim.

A bigger GDP won’t automatically help it win that contest.

Geopolitics aside, what will being Africa’s giant mean for most Nigerians? Not much. Despite one of the top economic growth rates, poverty in Nigeria has been increasing.

“In practical terms will recalculation make much difference? Possibly in diplomatic terms, showing Nigeria’s power. Will it make Nigerians feel richer? I doubt it,” Goldman said.

The limits of GDP?
Unorthadox economists like Joseph Stiglitz have long argued that GDP is “a poor measure of well being”, because it fails to capture things like health, income equality and the environment.

South Africa’s GDP per capita is six times Nigeria’s and on most counts of quality of life, it scores better. Roads are good, tap water drinkable, and the power supply usually ample even if the grid is almost stretched to capacity.

Nigeria’s roads are potholed, its water polluted and its power stations generate less than a mid-sized European city.

“In terms of economic development, Nigeria has far to go to catch up with South Africa. An increase in GDP is not going to suddenly change that,” said Standard Bank’s Samir Gadio.

Nigeria also has one of the world’s worst records on environmental protection. The Niger Delta, a labyrinth of tropical swamps home to hundreds of bird species, is a place where energy majors spill huge quantities of oil with impunity.

Frequent pipeline attacks by oil thieves leak even more.

South Africa, by contrast, has some of the toughest laws to protect its wilderness in Africa. A rhino poaching epidemic to feed East Asian demand for quack medicines may be testing its resolve. In Nigeria, though, the rhino is long since extinct. — Reuters

http://mg.co.za/article/2012-05-07-i...ia-ahead-of-sa

[Diggerdog]

I like the new optimism in the rest of Africa, and love that places like Angola are booming.
It is high time Africa joined the party.

But now is the time to hold African governments accountable, put massive pressure on them to use this wealth wisely.

Nigeria has no excuse now for its miserable infrastructure - if the economy is indeed going along at 7% - it MUST translate into better roads and rail, more power stations, investment to diversify the economy (95% of govt revenue in Nigeria is from oil!)

Without this investment, Nigeria will never challenge SA as the top dog in Africa.

[SUNS 25]

Very true Diggerdog, The progress is praiseworthy, but many things are to be made.

[Naijaborn]

seriously what does the Extinct white Rhino in Nogeria, have to do with Nigeria moving close or surpassing SA's Economic size?.... The white Rhino probably became extinct decades ago in Nigeria.

The south African press, concentrated on all thenegatives....right, it was expected...... throwing hay and straw
but what about the +ves??

for example, Oil spill in the 2000's isnt as worse as it was in the 1990's
or that, even though low, on the corruption index, Nigeria's rank as infact been steadily improving??
Or various government economic reforms.....and moves against corruption.

Anyways...cheers.

[Diggerdog]

This is a Reuters article, written by a Lagos based correspondent!

The quotes about Nigeria 'doing things terribly' are from a Nigerian - Fola Fagbule, Africa Finance Corporation vice-president.

The other quote about graft of '6.8 billion going unnoticed' comes from an EMM - Europe Media Monitor - source.

So nothing to do with the SA media.

And the Rhino thing is an analogy, obviously - to portray the difference between the two countries in terms of organisation and accountability.
Dont be dense.

The article also takes a stab at South Africas fall in the perceived corruption index. We as South Africans know that, and are fighting hard against it. In fact, the public is in such a state of uproar, the media in SA hardly report on anything else.

In Africa, we need to stop making excuses, and just fix the problems already...

[Tbite]

Diggerdog....people need to stop wasting their time..writing needless articles.

Nigeria's GDP rebasing..is a GDP rebasing....nothing more nothing less.

Any idiot with half a brain knows that. I don't know who is stupid enough to think that a GDP increase means a country has surpassed another country.

But if South Africans feel the need to obsess about all of this then so be it.

And 95% of Nigeria's revenue is not from Oil. The Non oil sector is larger than a lot of reporter state and when you add the tax base into the equation...it certainly isn't 95% revenue!

[Mister79]

Nigeria needs to start major economic reforms to increase it GDP to at least 1000 billion dollar. They have started some reforms, but that is not enough. They need more privatising, more easy doing business reforms, allow foreigners to own some companies for 100% etc
Banking, telecom are booming and they should focus now on modernizing agriculture and mining who have more potential.

Nigeria should copy the economic reforms of oil countries like the UAE, Qatar, SA etc. UAE and Qatar have very open economies. Saudi-Arabia started since a couple years to reform its economy to become less depending on oil. They make it easier for investor to invest, allow investors to own companies for 100%, tax free zone etc.
That is why SA is now attracting investments in other sectors than oil and their non-oil GDP is rising..

Angola, Venezuela, Algeria etc have closed economies totally depending on oil and problems to create a big private sector, because they are not interested in economic reforms. That is their weakness..

[Tbite]

Nigeria has the largest FDI in Africa...some sources say it is South Africa...but that is wrong

it is Nigeria.

Furthermore.....the reliance on Oil is decreasing every year....and really when you look at how.....the Nigerian economy operates...you have Oil Revenue which is shared amongst the three tiers of Government.

If you say that Oil accounts for 95% of the revenue...which I believe is wrong...I think it is 90%....then what you are really referring to is the revenue for the Federal Government which is then distributed to other tiers of Government; the State and Local Governments.

The State & Local Governments actually have other sources of income aside from the national account. The largest State economy in Nigeria gets 60% of its revenue from Internally Generated sources!

And that is a 40 Billion Dollar economy...which I predict could be as large as 80 Billion Dollars in reality.....and that economy is gathering most of its profits from Internally Generated Revenue!

You begin to see that even in the Oil producing states of Nigeria where Oil Revenue is quite high and really makes up the economy, the economic growth has not reflected this. The issue for Nigeria has really been a matter of production and efficiency. You begin to move away from a mono economy once you have services and most importantly production. The problem is that once you look at state economies such as Rivers State etc which is the Second largest economy in Nigeria, you have a large amount of funds dedicated to Governance, recurring expenditure etc.

So the issue we have really faced in Nigeria that has obstructed expansion, is an issue of efficiency. Nigeria is actually opening up its economy and probably....receives the largest amount of externally sourced income. 60% of Remittances, FDI etc. We are even now implementing the Rwandan Business Model. We are seeing a lot of investment in Nigeria.

The issue to really accelerate things, is to create that efficiency to create the systems that work. The systems that work being Infrastructure, services etc.

A lot of investors in Nigeria from South Africa for example have actually found that Nigeria is easier to do business than a lot of investors realize, the real challenges have been in the logistics department. Now if we capture the revenue that we have in Nigeria and direct it towards capital expenditure, the economy will expand.

Diggerdog said that Nigeria is not truly expanding which is quite wrong. Most of Nigeria's growth has been service sector led which relies on Infrastructural expansion and systems. We have also had expansion in the Gas Sector, Mining Sector and we have had expansion in Agriculture which all rely on infrastructural growth. The rail sector is expanding and the road network is expanding in most parts of Nigeria.

The rate at which this occurs once again, goes back to a matter of efficiency.

Now poverty increases and standard of living, the paradox goes back to the issue of production.

[Diggerdog]

Tbite...the point is that the article was NOT South African! Understand! Stop saying South Africans are obsessing about Nigeria...most don't even register anything about Nigeria.

And the figure they usually throw around is 95% revenue from oil...I don't really care one way or the other, thats just the info that's out there...