Nigeria and Ghana are among the three fastest growing markets in the world, a report released by Ernst and Young confirmed.
According to Ernst and Young’s quarterly Rapid-Growth Market Forecast (RGMF): “There is a mixed picture emerging across the world. Although Asia is likely to lead the way, Africa remains resilient overall, with Ghana and Nigeria among the three fastest growing of the RGMs this year.”
In the next two years, both African nations are estimated to be among the fastest 25 leading rapid-growth in the world. The report also indicated that the power sector holds the key Nigeria’s economic growth and development, asserting that economic expansion in the 25 leading Rapid Growth Markets (RGMs) has started to slow sharply since the beginning of this year but this will only be a temporary blip.
However, Co-leader of the Emerging Markets Centre at Ernst & Young, Alexis Karklins-Marchay was quick to stress that “although slower expansion in the rapid-growth markets is likely this year it will only be a blip and we will see a return to significant growth towards the end of the year. Soaring domestic demand in economies starved, for some time, of investment and consumption will offer business exciting new markets for goods and services in the years ahead.”
“Despite the slowdown in growth experienced by the RGMs at the beginning of this year they will begin to bounce back towards the end of this year and in 2013. The ability to relax policy to boost growth, a growing middle class to aid consumer spending and a strong rise in FDI flows will ensure continued growth well into the future”, he added.
According to Bisi Sanda, a Senior Partner, Transaction Advisory Services, Ernst & Young, Nigeria, the power sector is pertinent to Nigeria’s economic growth and development.
He said that “If the government of Nigeria completes its privatisation of the power sector assets in 2012, it will provide much required fresh breath to the much delayed reactivation of stimulus of the manufacturing sector, including the reactivation of over 100 textile mills that closed down or relocated from Nigeria between 2000 and 2007. Power is an enabler in Nigeria.”
Meanwhile, Senior Economic Adviser to Ernst & Young’s RGM Forecast, Carl Astorri, explained: “The RGMs are well placed to weather the major risks facing the global economy at the present time, given that they have the space to relax fiscal and monetary policy. This has already happened in some RGMs including in all of the BRICS. It is likely that there will be further easing of monetary policy in the months ahead, particularly if the global economy deteriorates further.”
Similarly, Co-leader of the Emerging Markets Centre at Ernst & Young, Alexis Karklins-Marchay, stated that soaring domestic demand in economies starved, for some time, of investment and consumption would offer businesses new markets for goods and services in the years ahead.
“The growth in household incomes will lead to increase consumer spending. In 2011, two-thirds of consumer spending across the world came from the advanced economies, with the remaining third coming from the emerging markets. However, in 25 years time emerging Asia alone will have overtaken the advanced economies as the key source of consumer spending, responsible for almost 40 percent,” the report added.