Reports of South Africa overtaking Nigeria in the Gross Domestic Product (GDP) rating hardly came as a surprise. Though it indicated that both countries have recorded drops in GDP in the last one year, Nigeria’s case was a huge crash compared to South Africa’s.
Nigeria’s US Dollar GDP was put at $296 billion, a 43.2% drop from $521 billion last year while South Africa’s clocked at USD301 billion, about 14.7% drop from last year’s $D353 billion. Nigeria was never as strong as the 2014/15 rebasing of the GDP had portrayed. The rebasing had pushed the statistics above South Africa, making Nigeria nominally the largest economy in the continent.
Even at that, it was clear that the large economy was like a clay-footed elephant that could collapse under the slightest pressure. Thus, it took just a slide in oil revenue compounded by ineffective policy responses to it by the President Muhammadu Buhari regime to bring the elephant down.
The report was too good for Nigeria, as grey areas in the economic statistics were not fully reflected. Just a glance at what has happened across Africa’s top five economies will give the proper impression of where the country stands comparatively.
Even as at last year when Nigeria’s GDP out-did South Africa, Nigerians were still almost four times poorer. South Africa’s GDP per capita was USD11,035, while Nigeria’s was a paltry USD2,700. Obviously, this reflected the downside impact of population on Nigeria’s economy.
But the irony is that most advanced economies have always looked at market size to put Nigeria first, yet the country has not been able to translate the market size into upside impact in economic performance, due to internal low production capacity. Consumption is high, but it is mostly imported goods.
Thus, most other African countries in the top five GDP category have always done better than Nigeria in terms of both GDP growth rate and income per capita. Nigeria has always come behind Egypt, Morocco, Algeria, Libya and Angola in per capita income.
Until Nigeria’s economy managers begin to engage its large population into productive activities contributing to the GDP it will always present a pitiable sight before its African peers in economic statistics.
Though the others are also reliant on primary produce such as agriculture and natural resources, the difference is clearly on diversification. Local industries have been developed to process the primary produce and get more citizens gainfully employed. This is also the way forward for Nigeria.
Nigeria must make its large population count by developing its economy and local industrial production before it can credibly compete with other continental giants in the prosperity rating. Otherwise our population will continue to tell negatively on our GDP.