Nigeria to knock S.Africa off top GDP spot - CNBC Africa

Nigeria to knock S.Africa off top GDP spot

Western Africa

by Dara Rhodes 0

Nigeria's entertainment sector hits 9 trillion niara. PHOTO: Getty images

The West African country, which is currently the second largest economy on the African continent, is expected to overtake South Africa as the biggest economy when the calculations are released.

This move is seen as positive for investment in Nigeria, however poverty and infrastructure woes are not likely to change.

The NBS will change the base year for calculating Nigeria’s GDP to 2010 from 1990 to reflect changes in the country’s economy, and more accurately assess its current output.

Sectors such as telecommunications, the internet and the country’s booming film industry therefore have to be taken into account for the first time.

According to a source closely monitoring the rebasing process, the entertainment sector in the country has been grossly underestimated in the past.

The country’s creative industry, which includes its film and music industry, is said to have made a huge leap from its 2013 worth of 1.72 billion naira. The industry is expected to also boost the GDP in 2014. 

The country’s current International Monetary Fund 2013 estimate of 292 billion dollars needs to be up only by a quarter to 365 billion dollars to overtake South Africa, whose current fund is estimated at 353 billion dollars.

Ghana, one of Nigeria’s West African neighbours, saw its output increase to 60 per cent when it was rebased in 2010.

On the other hand, some experts believe that when the GDP is rebased, the current GDP of 6 to 7 per cent could drop to about 3.5 and 5 per cent, and for the country to continue at its current growth rate, it will have to post a higher level of economic output per quarter than it is currently doing.

Despite all the positives the GDP rebasing may present, it's still believes that this step will not be enough to make Nigeria replace South Africa as an economic hub of Africa, as the country continues to lack basic infrastructure to pull the majority of its enormous population out of poverty.