Comedy: Nigeria’s Economy Set To Overtake South Africa

Filed under: Editorial,Featured |
Nigeria economy photo

Some estimates Nigeria has already overtaken SA

At a time when Boko Haram, some foreign-backed rebels and other sophisticated terrorist gangs are terribly destabilizing the peace and security in Nigeria, it is very interesting to hear various economists, consistently making countless predictions about Nigeria’s future economic prospects while the problem of security remains unresolved.

From the front pages of the dinosaur media to the editorial contents of the alternative media, the minds of poor Nigerians are being shaped for an impending “economic boom”, despite the existential threat posed by Boko Haram and other terrorist gangs spreading across the country.

But one may ask: how many countries have been able to develop economically, amid terrorism, conflicts or civil war?

Recently, many economic forecasts have predicted that Nigeria, (despite all the corruption and the bomb explosions) is on the path to overtake South Africa by the year 2020.
Nonetheless, it appears as if all those forecasts failed to look at the other side of the coin. The forecasts are all good. They create a sense of hope for the ordinary Nigerian. However, these forecasters seemed to have overlooked some key variables: peace and security in Nigeria.

During a recent African Summit organised in Lagos under the theme, “Africa in the Super-Cycle”, Mrs Razia Khan, head of Research Africa, Standard Chartered Bank, was highly optimistic:

Assuming normal GDP growth rates in line with post crisis trend; our simulation suggests Nigeria overtakes South Africa’s GDP size by 2018. Our own analysis suggests that Nigeria will overtake South Africa to become Africa’s largest economy.” –the report explained.

Khan repeated this prediction at the Nigeria Development and Finance Forum (NDFF) conference held in in London.

Again, Renaissance Capital (RenCap), a global investment and research firm in its report, also suggested that Nigeria’s economy will surpass that of South Africa sooner than previously expected, placing the actual date in 2014.

Similarly, a senior British official, Lord Mayor Alderman Michael Bear, also waded into this debate when he suggested last year that Nigeria’s economy may surpass that of South Africa within the next 10 years.
In a related report, Morgan Stanley, an economic think tank, confirmed in its research projections that Nigeria’s economy may reach about $400 billion by the end of the decade and could overtake South Africa by 2025.

“High oil prices, the ‘decisive’ election of President Goodluck Jonathan and ‘buoyant consumer spending’ will all push Nigeria’s economy into the front in the next 15 years”, – the report claimed.

It appears these economic forecasters, haven’t learnt lessons from Afghanistan, Iraq, Somalia, Sudan, the Congo, the “New Libya” and many other countries where terrorism, civil war and ‘fraudulent democracy’ have destroyed similar economic prospects, despite having plenty of oil and gas and other strategic mineral resources.

Of course oil and gas have remained key elements in Nigeria’s economy despite its low oil revenue. In a country where oil remains about 80% of  GDP, there are strong indications which add up to the conclusion that Nigeria continues to sell its oil at $9 per barrel, at a time when many oil producing countries sell  oil for a whopping $100 and beyond. How does this happen? The answer is not far-fetched.

In his article: “The Looting of Nigeria: BIG OIL’s $140 Billion A Year and Counting”,

Thomas C. Mounting made the following analysis:

As western oil companies loot some $140 Billion a year of Nigeria’s black gold, two thirds of the country’s population live on less than $2 a day. “Official” oil production figures show about 3 million barrels a day being pumped from oil fields into western tankers. However, informed observers have estimated up to one-third of all Nigerian oil is actually ‘stolen’, secretly loaded onto oil tankers after bribes are paid to corrupt government officials. If 4 million barrels of oil are being shipped out of Nigeria daily at $100 a barrel, times 30 days a month times 12 months (4x100x30x12) you arrive at almost $150 Billion a year in potential oil revenues for Nigeria, he explained.

The problems is not just theft of the oil but the fact that the western oil companies are literally looting Nigeria’s oil, paying as little as a 9% royalty. Do the math: 9% of $150 Billion (is about $15billion) minus the one third oil that is stolen (5billion) thus, the Nigerian government only receives about $10 billion a year of this amount. Simply put, at $100 a barrel the western oil companies get $91 and Nigeria only gets $9. Or more shockingly, Big Oil makes $140 billion a year vs. Nigeria’s $10 Billion”, he concluded.

With the above calculation, it is clear that the oil is becoming a curse to the ordinary Nigerian rather than a blessing. The foreign companies are looting Nigeria’s oil on a mass scale while economic forecasters continue to give the people a false sense of hope based on oil reserves.

In order for the Nigerian people and the Federal Government to be able to fulfil this dream of overtaking South Africa economically; there are certain key issues that must urgently be addressed. Until then, one could reflect on those economic forecasts for a sense of humour.

1.      Security

Having plenty of oil and gas and other strategic mineral resources in itself is not a guarantee to becoming economic giant. Iraq, Afghanistan, Congo, Sudan, New Libya and many other countries are clear examples. For Nigeria to overtake South Africa economically, she will need a very peaceful political atmosphere where economic growth can thrive.

This is the area where the threat of Boko Haram and all the other militant groups in Nigeria come in. The government must resort to negotiations and dialogue rather than issuing mere empty threats that provoke these rebels to strike. The Federal Government must find a more convenient way to address the concerns of these militants, if indeed they’re not foreign-backed rebels but true Nigerians who have issues with the government.

There are many of us today who have reasons to believe that the current Boko Haram in the news, are not Nigerians but a covert operation of certain foreign countries that seek to create the atmosphere to pave the way for NATO or AFRICOM to be invited to the region under the guise of humanitarian mission. Many analyst foresee the splitting of Nigeria as the only means to loot the country’s resources on a larger scale.

If the members of Hoko Haram are truly Nigerians, then the government should invite them for negotiations and do everything possible to find a peaceful settlement for them, so that the Nigerian people can leave in peace. Together, they can work to ensure the development of the country. Without security, Nigeria may soon become the “New Sudan” which could split into smaller and weaker states, making her economic aspirations impossible.

2.      Corruption

Fighting corruption in Nigeria is another important milestone towards becoming Africa’s economic giant. Politicians and the banking industry are looting billions of taxpayer’s money whiles the ordinary citizen lives on less than $2 a day. Africa’s educational institutions and the media especially those in Nigeria must work hard to expose corruption in the oil and gas sector and the banking sector. Investigations must be conducted into all the money that is flowing from Nigeria into foreign banks. Investigative/undercover journalists must conduct secrete investigations and expose crimes such as bribery and corruption in government and in the oil and gas sector. This could help bring corruption to the barest minimum.

3.      Industrialization

Any African country that seeks to become an economic giant cannot succeed by merely supplying raw materials to the outside world. Nigeria must therefore focus on building more industries that will create more jobs to put the youth to work. This will help reduce the crime rate in the country that is getting out of control as a result of huge unemployment among the youth. Also, Nigeria must have its own refineries in the country, to refine its crude for both domestic use and export. This will bring down the high refinery cost and also create more jobs in Nigeria.

Conclusion

With the current challenges posed by Boko Haram and other rebels in the country, there is no doubt that Nigerian politicians may squander the oil wealth on corruption or mismanagement and turn the blame on terrorists for their inability to meet the targets predicted by these economists. This is the reason why every effort must be made to address the problem of insecurity in the country to lay the grounds for the projected economic prospects.I urge all Nigerians: northerners, southerners, Christians, Muslims, etc to unite and work had for the development of their country. To the youth, I say never allow any politicians to use you in any way to achieve their own selfish ambitions. Think about your country and your people. If Nigeria were to succeed and become peaceful, it will be for your own good.

Long live Nigeria!
Long live Africa!! 

 

By; Honourable Saka

The writer is a political analyst on African affairs, and a well-known social commentator in Africa. As a strong Pan-Africanist, he is currently seeking to establish the “Project Pan-Africa” (PPA) to create a mental revolution across Africa for the freedom of the African people. Please visit Project Pan-Africa at: www.projectpanafrica.org and Email him at: [email protected].