AFRICANGLOBE – Nigeria is likely to take South Africa’s position as the continent’s largest economy within two years, a Reuters’ poll has found. Nigeria’s gross domestic product will receive an enormous boost when it is rebased by year end to more accurately reflect changes in the economy over the last two decades.
The much-delayed rebasing could add up to 50 per cent to Nigeria’s economy, giving it a nominal GDP of around $375 billion which is almost the size of South Africa’s.
Strong domestic demand and high levels of agriculture and services activity will see it clinch the title of Africa’s biggest economy within a couple years if current growth rates are maintained.
High unemployment and a slowdown in the euro zone, South Africa’s main trading partner, make it vulnerable to losing its number one spot. It is set to grow at just 2.6 per cent this year.
It must be noted, however, that while being number one in the continent may boost Nigeria’s profile, South Africa still enjoys a better GDP-per-capita ratio compared to Nigeria, and therefore a slightly better standard of living.
The Nigerian economy has been growing faster than the South African economy for some years. In 2012 Nigeria’s economy grew by 6.6 per cent while South Africa’s grew only between 2.3 per cent.
According to the National Bureau of Statistics, the fastest growing segments were wholesale and retail trade, and telecommunications. Nigeria’s 160 million people make it the most populous country in Africa and the seventh-biggest in the world.
This creates a massive market, attracting investment from across its borders, including from South Africa, which is becoming increasingly aware of the opportunities in servicing this population.
In contrast, South Africa’s population is estimated at 51.1 million (5.7 per cent of the population), making it the fifth most populated country in Africa.
By: Nse Anthony-Uko