As of last Sunday, Nigeria is Africa’s top economy and the 26th largest in the world. The country underwent a process of recalculation, bringing the base year of calculus from 1990 to 2010 and its GDP jumped 89%. New data provides a more adequate assessment of the country’s economic structure and includes several important sectors that were previously excluded from the statistics. The film industry (the second biggest employer after the oil industry) telecoms, music, online sales, airlines and information technology are among them.
This new data, revised and approved by the IMF and World Bank paints a prettier picture of Nigeria’s economy, not just because it is 89% larger but also because it is more diversified (full data available here). As Africa’s biggest oil producer and exporter, Nigeria could have allowed its economy to be over dependent on the oil industry, as most producing countries are. Instead, the sector accounts for only 14.4% of National GDP (even if it is the source of 70% of the state’s revenues).
Agriculture and industry have 21,6% and 25,6% of the share, respectively, and telecoms are now a huge part of the economy as well (see chart above). The sector accounts for 8,6% of GDP and has seen a rapid growth in the last few years, as mobile phones become more and more accessible to Nigeria’s 169 million citizens. Nollywood, the country’s film industry and second biggest employer, accounts for 1,4% of GDP. Services, as expected, dominate and are responsible for 51,9% of GDP.
All these indicators paint the picture of a healthy economy that is worth a second look by investors and could be the start of a new age of investment in Nigeria, and possibly in Africa. Often referred to as the “world’s richest continent”, Africa is poised for an economical boom and it is only a question of “when”. Adding to the already attractive indicators, is the fact that Nigeria’s economy is under performing. South Africa’s population of only 51 million managed to achieve a GDP of $372bn last year. With 169 million people living within its borders, Nigeria’s GDP stood at $509bn. Numbers that mean the country can dream of even more if it can improve its productivity. Investment should not be hard to find and, with public debt dropping to 11% of GDP, some of it can even come from the state.
However, there are some problems that the government must try to solve. Terrorism and violence are still a problem in the North, due mostly to the Islamic extremists of Boka Haram. Attacks continue to make headlines when it comes to African news and can be a major disincentive for possible investors. Another issue in Nigeria is inequality. While the economy has been growing steadfast, 60% of the county’s population live in extreme poverty, while at the top end, new multimillionaires emerge, each year. Such inequality can stifle violence, crime and instability, another investor deterrent, and can partly explain the prevalence of Boka Haram.