MacroScope

Nigeria’s mighty economy

April 26, 2012

In a world of slowing growth (China), minimal growth (United States) and outright recession (Britain),  it is startling to hear that Nigeria’s economy is likely to shoot up by 40 percent in the second quarter this year. Yep. Forty percent. Four – O.

An investigation by Reuters Lagos correspondent Chijioke Ohuocha came up with this staggering figure — which if borne out will lift Nigeria close to continental rival South Africa and raise it about 10 places on the IMF’s global list to around 3oth.

This mighty rise, however, is not actually because Nigeria has had a sudden spurt of growth. You can read Chijioke’s exclusive story here, but the gist is that the country is changing the base year for its GDP calculation to 2009 from its current 1990.  One big reason is that data is better; another that it is more modern, taking in things like  mobile phones and the internet, for example. It is the latter, and things like it,  that have built up growth over thr years.

Nigeria’s current annual growth is around 7 percent, which puts it on track to overtake slower growing South Africa as Africa’s Number 1 economy.  That, in itself, should make the country more of a target for investment over the longer term. It is currently considered “frontier”, which is a small pool when it comes to investment flows.

For now, though, it is as Chijioke writes: “The makeover may give the country financial bragging rights, but will change little for the millions trapped in poverty.”

The percentage of Nigerians living in absolute poverty, unable to afford only the bare essentials of food, shelter and clothing,- has risen to around 60 percent even as growth — rebased or not —  has risen.

 

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