The largest economy in the world is the U.S. with a GDP of $17.5 trillion, followed by China with $10 trillion. However, Nigeria has now earned bragging rights for being the largest economy in Africa with about $500 billion. It is the 26th largest economy in the world.
With success in telecommunications, information technology, music, agriculture, tourism and “Nollywood” film production, Nigeria’s GDP has increased in the last few years. Although it is the highest economy in Africa, 70 percent of Nigerians still live in poverty.
In comparison, South Africa has a GDP of about $370 billion. With a population three times larger than South Africa, Nigeria may have a larger GDP but its economic output is underperforming for its population size.
Most countries measure GDP every three years, but Nigeria’s last update before April 2014 was in 1990. Even with the previously uncounted industries, Nigeria’s higher GDP is not feeding more people or putting more money in their wallets.
However, there have been many improvements since the 1990 GDP measurements. The country went from having 300,000 phone lines in 1990 to 100 million cell phone users today. Also, in 1990 Nigeria only had one airline. Now the country has many airlines and the tourism industry is growing.
While the recalculation doesn’t provide much benefit for the ordinary Nigerian citizen, it positions the country as one of the world’s best emerging-market investment opportunities. But, the nation remains 121st in the world in income per capita, with an average income of $2,622 per citizen.
Nigeria may attract foreign investors with its new GDP calculation, but after the initial attention, investors will have to base their decision on other factors including the governance system, corruption and infrastructure.
Ordinary citizens are not going to change their behavior because of the rebasing of the Nigerian GDP, but the attention the country will get from investors has the potential to help lift the country out of poverty.
— Haley Sklut
Photo: The Gaurdian