Posts

, , , , , ,

Silk Invest: Africa Food Fund Helps Local Businesses

Silk InvestSilk Invest is a private equity firm founded in 2008 that invests in emerging markets that demonstrate the potential for long-term economic growth. The largest private equity fund managed by the firm is called The Silk Africa Food Fund. Investments made from this fund target companies involved in food processing and distribution throughout Africa.

The Silk Africa Food Fund

The fund was started in June 2012 and focuses primarily on businesses that distribute food to African consumers. Countries that attract investment the most are those which are institutionally and politically stable enough to support long-term economic growth. Silk Invest is distinct from many other foreign investment funds that support the effort to reduce hunger in Africa in that it does not target agriculture but rather the distribution of food to consumers.

The three largest investments the fund is involved with are Nigeria’s Sundry Foods Limited, Ethiopia’s Nas Foods Plc and Egypt’s El Rashidy El Asly. Of these three, Nigeria’s Sundry has seen the most significant success and expansion following its partnership with Silk Invest.

The Success of Sundry Foods Limited

The company runs the popular restaurant chain, Kilimanjaro, as well as bakery and food catering services throughout the country. When Silk Invest first gave funds to Sundry in 2012, the company had seven restaurants open and a revenue base of around $3.4 million. In 2020, just eight years later, Sundry has 40 restaurants and a revenue base of around $34 million. The entrepreneurial effort of the company’s founder, Ebele Enunwa, has been instrumental in this progress.

Sundry is a company firmly rooted in supporting its fellow local businesses. Instead of setting up in the more commercial capital of Lagos, Enunwa established headquarters in Port Harcourt where he is a local entrepreneur. Its management team consists of local hires and its supply chain uses locally sourced raw materials, including chicken and rice from rural areas.

Sundry’s Impact and Potential

Sundry Foods Limited represents an example of the enormous potential which exists for businesses in developing nations when the proper investment is made. By providing capital to Sundry, Silk Invest gave the company the tools it needed to expand its operation. By doing so, Sundry has not only offered an improved service to consumers throughout Nigeria but has also stimulated its broader community’s own economy by maintaining a steady and even increasing demand for local products.

The impact made by Sundry’s growth is palpable. Over the last 10 years, the company has created over 2,000 jobs. Silk Invest’s Africa Food Fund is hugely impactful in the effort to reduce poverty in developing nations not only because of the direct benefit the invested capital provides to individual businesses but also because of the economic growth created in broader communities as an indirect result.

The Importance of Investing in Africa

This impressive progress was all stimulated by a $2.4 million investment. The high return for Silk Invest demonstrates that funding businesses in developing countries is not only beneficial to the growth and development of those businesses but is also a practical and sound investment for the firms offering the capital.

Investing in the effort to reduce world hunger presents impactful and beneficial opportunities for all parties involved. By establishing the Africa Food Fund, Silk Invest has committed itself to this effort while simultaneously supporting developing economies.

– Haroun Siddiqui
Photo: Flickr

, , , ,

5 Facts About the Technology Renaissance in Africa

5 Facts About the Technology Renaissance in Africa
As of 2019, 11 percent of the world’s internet subscribers are from Africa and only 39 percent of Africans use the internet. However, Africa is quickly closing the digital gap with the developed world. Here are five facts about the technology renaissance in Africa, as digital technology rapidly expands across the continent.

5 Facts About the Technology Renaissance in Africa

  1. Africa is Ripe to Enter the Tech Economy: Africa has multiple advantages over other regions in developing a technology-based economy. The continent has the youngest population in the world with an average age of 19.5, meaning that there is a large population of young people looking for a chance to break into the technology industry. Because of the continent’s late entry into the global tech economy, African tech companies can learn from the early mistakes of tech hubs like Silicon Valley. Further, Africa is entering the digital market at an ideal moment – by entering the industry late, African techies can immediately take advantage of globalized internet technology, bypassing outdated infrastructures such as landlines and branch banking and directly adopting mobile phones or mobile money.
  2. Technology is Revolutionizing Other Sectors: Technology is not just good for the technology industry – as many countries have discovered, one can apply tech to a multitude of industries. Technology is revolutionizing education in Africa through digital books and online classes with global universities such as Harvard and MIT. An app called iCow helps farmers manage their cattle populations. Africans can attend church services online, solving problems of limited religious resources in smaller communities. Additionally, mobile phones and increased connectivity have already been critical in responding to crises like Boko Haram kidnappings in Nigeria.  New technology has already had a profound effect on both commercial and social industries.
  3. Tech Education is Booming: Recognizing the critical need for technology-based education, multiple universities in Africa now offer software engineering, computer science and other tech programs that compete with established universities such as Yale or Stanford. Further, technology accelerators are rapidly growing. French telecommunications company Orange opened its first African digital center in Tunis, Tunisia in April 2019, which will support startups and educate young entrepreneurs. Nairobi, Kenya-based Andela is the top computer engineering accelerator in Africa, connecting its students with tech jobs around the world.
  4. Africa is Building its Own Tech Economy: The technology renaissance in Africa means that the continent will eventually have its own independent tech market. For example, in October 2019 President Paul Kagame of Rwanda inaugurated Africa’s first smartphone factory. The factory does not produce iPhones – instead, it produces the Mara, a mobile phone that the pan-African Mara Group developed. The Mara is unique in that it is the first phone a company entirely assembles in Africa. Other African companies entering the smartphone market include Onyx Connect from South Africa and AfriOne from Nigeria.
  5. Growing Tech Industries Raise GDP: The increase in access to technology is critical to increasing African countries’ economies. The World Bank reports that a mere 10 percent increase in internet penetration represents a 1.38 percent increase in GDP for a developing country. The growth of African technology also attracts international business – IBM, Google, Facebook and Microsoft have all begun investment projects in Africa based on the continent’s technological growth. Though getting widespread technology access across dispersed communities is a challenge, African governments are coming together and developing plans to move the technology renaissance in Africa forward.

Though African countries are still developing, the continent is becoming a major player in the global technology economy. From international investment to country-specific development, a technology renaissance in Africa is truly underway. The next decade will only see more development and innovations from the “Silicon Savannah.”

– Melanie Rasmussen
Photo: Flickr

, , ,

How Mall for Africa Boosts Economic Prosperity

Mall for Africa Boosts Prosperity
Mall for Africa boosts prosperity by allowing African consumers to purchase items from retailers located in the United States and the United Kingdom. The company’s innovation offers a secure and easy way for African citizens to purchase items online.

The Foundation of Mall for Africa

Chris Folayan, a Nigerian citizen and the founder and CEO of Mall for Africa, opened Mall for Africa in 2016. Foloyan founded this organization in Nigeria because this nation is the most affluent and high-powered country in Africa. Folayan has plans for Mall for Africa to expand in several other African nations as well, such as Ghana and Kenya.

The primary objective of Mall for Africa is for customers to purchase items from the U.S. and the U.K. and to market their own goods effectively in the absence of fraud and theft. Companies transport their products to the United States and United Kingdom infrastructures. Africa then receives the items.

In 2018, Mall for Africa began coordinating with the United States Overseas Private Investment Corporation (OPIC) in order to construct facilities in 15 of Africa’s nations. The purpose of this was to reduce shipping costs from international companies and allow for secure payment methods with provincial dollars.

Africans who make purchases online often pay high-cost fees for shipping items. To counter this, Mall for Africa opened storehouses in Portland, Oregon and London to reduce transportation costs. Furthermore, customers are able to purchase items using their own currency through new payment options.

Market Advantages

Mall for Africa boosts prosperity in Africa because of the availability of supplies and materials that generate employment opportunities, improve schooling and new forms of medical treatment. In particular, one entrepreneur purchased a sewing machine which enabled her to begin her own sewing operation. Educational institutions have benefited from Mall for Africa by having the ability to purchase necessary academic materials. These materials include items such as computers and books.

The medical field has benefited from the ability to obtain medical equipment. This gives doctors the ability to effectively pronounce medical conditions and offer treatment options.

Mall for Africa has helped create jobs for Nigerian residents. For instance, more than 60 citizens work full-time. Some expect the number of workers to increase with the implementation of new infrastructures in other African countries.

Since the company first launched, Mall for Africa has boosted prosperity in terms of profit. In fact, it has produced millions of dollars in yearly profits. An expansion of profits should happen due to the implementation of this business in other African nations. In 2019, Nigeria and Kenya are expecting to see a large increase in sales due to the development of various enterprises and the expansion of the working class earning more pay.

eBay’s Collaboration with Mall for Africa

While Africans are able to purchase products overseas as of 2017, Americans now have the ability to purchase original artifacts from Africa through the Mall for Africa application on eBay. Residents in some countries have the ability to sell their artifacts through eBay and market these products to U.S. consumers. Some of these countries include Nigeria, Kenya, Ghana, South Africa and Burundi. The commodities will be available through the Mall for Africa application on eBay, which enables entrepreneurs to expand brand awareness and increase economic prosperity in Africa.

The primary groupings of products are fashion, antiques and jewelry. Mall for Africa will likely include other groupings in the future with the addition of other African countries selling their products.

Mall for Africa’s shipping co-partner, DHL, handles the transportation of all packages. The merchant packages their items then delivers the package to the closest DHL shipping facility. In February 2017, DHL reported a substantial rise in international sales. The company predicts that by 2020 the online market will progress at a rate of 25 percent annually. That is close to double the volume of sales achieved nationally.

While this partnership is expected to expand inventory to the United States, there will also be opportunities for economic advancement for Africans who now have the option of selling their products internationally. Overall, Mall for Africa boosts prosperity for the African continent.

– Diana Dopheide
Photo: Flickr

, ,

SoleRebels: An Ethiopian Shoe Company That Helps Struggling Artists

SoleRebels
A new company in Ethiopia is revolutionizing the way people make and sell shoes. SoleRebels, founded in 2004 by Bethlehem Tilahun Alemu, crafts traditional Ethiopian footwear.

The company also provides employment opportunities for impoverished people within the local community and abroad. Alemu’s goal in starting such an enterprise was to help kickstart Ethiopia’s economy by creating well-paid and sustainable work.

In addition, the company ensures that all of its employees have access to on-site medical checkups and transportation. Africa-Middle East projects that the company will earn over $10 million in revenue this year. SoleRebels will also sell their wares internationally. The shoes will sell in flagship stores and in partnered organizations such as Whole Foods and Urban Outfitters.

Alemu decided to start SoleRebels when she noticed the poor living conditions of artists in her local neighborhood. It all began with nothing more than half-dozen of those struggling artists crafting shoes in a small workshop. However, she quickly expanded her enterprise.

In an interview with Wharton, Alemu said, “We aimed from day one to create, grow and control a world-class footwear brand right from our community that would create ever more jobs and growing prosperity for the workers, and to do this by leveraging the artisan skills of the community and the natural resources of the nation.”

SoleRebels currently remains the only Fair Trade certified footwear company on the market today. This means that they have undergone a rigorous auditing process to determine that all of their products are made in accordance with sustainable working conditions and environmental practices.

In the future, Alemu hopes to expand upon SoleRebels’s mission by building a full scale production facility. However, she assured Wharton, this will not change the organization’s artisan-driven model, which she cites as key to the company’s success.

She explained, “This model will not simply forever end aid dependency, but it will allow Africa to compete in the global marketplace of ideas on our own terms, and at full value for those ideas. And once we do that, then the images associated with Africa will be forever changed in a way that is real and meaningful and tangible.”

– Sabrina Santos

Photo: SoleRebels

, , , , ,

Why Every Woman in Africa Should Have Access to a Cell Phone

Cell PhoneAs technology continues to advance and grow more accessible, women around the world are increasingly gaining access to a cell phone for the first time. Though it is taken for granted in much of the developed world, cell phone use opens multiple doors that were not there before. According to Africa in Focus, technology can be thought of as a tool that creates opportunities for women. Specifically, technology has permitted women entry into the realms of finance, education and health and employment, thereby encouraging female empowerment and democratization in low-income countries.

Firstly, cell phone ownership gives women the ability to be financially independent, because they can open an online bank account separate from their husbands’. Impatient Optimists claims that “A private account gives women in developing nations control over their money as well as the ability to put food on the table.”

Currently, 1.7 million women in low-income countries don’t own a cell phone, according to the GSMA (an association representing mobile operators worldwide). Women are also 14 percent less likely to own a phone than men. Therefore, technology is a vital component of big-picture solutions to gender inequality and female disempowerment.

Secondly, cell phones are beneficial in the realm of women’s education and health. Impatient Optimists notes that “The East African nation has rolled out an ambitious program allowing parents to register their child’s birth via mobile phone. Under the program, midwives can request a child’s birth certificate by sending a text message.”

The East African program will save women time and money because they will not have to travel to the capital to acquire a birth certificate for their child. The Millennium project reported that most women live on less than 1 dollar per day. Under such conditions, the option of an online birth certificate can have a dramatic impact. Significantly, children in Africa need a recorded birth certificate in order to access schools, medical care, and, eventually, a bank account.

Thirdly, cell phone access can increase employment for women in Africa. Impatient Optimists points out that having a mobile phone allows women to open their own businesses in remote villages, as opposed to walking a great distance in order to register the business.

The New York Times recognizes that, “economically empowered women are one of the most important engines of growth in developing countries, and they play a central role in building prosperous communities.” That is why women in Africa must have their own phones, instead of sharing with family members.

When women have access to their own phones, bank accounts, and financial situations, they often invest in health-care, nutritious food and education. In fact, The New York Times reports that, “A child born in a household where the mother controls the family budget is 20 percent more likely to survive and much more likely to thrive.”

Women in Africa should be given the power and authority to make financial decisions for their family, given that they tend to prioritize moral and just causes. A mobile phone in the hands of a determined woman could benefit not only the economy, but the daily lives of families across Africa.

– Megan Hadley

Photo: Flickr

,

Supporting Regional Compacts To Promote Prosperity

Regional CompactsMany developing countries struggle to catalyze their economies because they are isolated and their governments are ineffective. When corruption is rampant, it is difficult for meaningful change to happen. And when countries are unable to collaborate with their neighbors, they usually stagnate. These kinds of issues, however, are being addressed by the Millennium Challenge Corporation (MCC), an American agency that draws up regional compacts to promote prosperity in developing countries.

The MCC works mainly with African countries but also creates regional compacts in South Asia and Central America. To date, its 32 regional compacts benefit 26 countries and about 175 million people around the world.

The compacts serve several purposes. Firstly, they encourage partner countries to achieve and maintain good governance. When governments are reformed along the lines set down by the MCC, it is easier for adequate economic changes to be properly implemented.

The economic changes consist of promoting sound investment and securing economic freedom. The MCC invests about $1 billion in grants per year in its partner countries. Most of this money is used to improve road and energy infrastructure, facilitate access to clean water and increase people’s educational and financial opportunities.

What makes the compacts successful is that they encourage countries to collaborate in achieving these goals. Improving infrastructure across national boundaries facilitates trade and migration, thereby increasing opportunities for growth and exchange. Measures to preserve the health of workers and consumers, in addition, keep economies going once they start to expand.

Because of the MCC, private investment has soared in Benin, Ghana and Jordan. Governments of Honduras, Cabo Verde and Senegal have achieved greater transparency and accountability because they follow MCC guidelines. The guidelines also encourage the empowerment of women. In Burkina Faso, for instance, thanks to regional compacts, improved test scores have expanded girls’ opportunities in the job market.

The World Bank estimates that the regional integration of Sub-Saharan African countries could double that region’s share of global trade, which is beneficial to both the MCC and the U.S. Since its inception in 2004, the MCC has enjoyed an average economic rate of return of over 16 percent. By helping other countries become more self-sufficient, it has generated many new opportunities for American businesses.

At the moment because of congressional restrictions, the MCC’s ability to use regional compacts to promote prosperity is significantly limited. But a bipartisan group of politicians in Washington are looking to change that. The House Foreign Affairs Committee has already passed legislation to strengthen the MCC — and an effort to do the same in the Senate, the M-CORE Act, is currently being considered.

Testifying before the Senate Foreign Relations Committee in December 2015, Chief Executive Officer Dana J. Hyde stated that the MCC “helps drive U.S. efforts to promote American values and the market democracy model” and is “creating new opportunities for the private sector, including U.S. businesses, to invest and grow.”

– Joe D’Amore

Sources: Borgen Project, Senate, USGLC, World Bank

, , ,

The Growth of Mobile Money in Africa

The Growth of Mobile Money in Africa
Millions of Africans utilize their cell phones to manage their finances. Mobile money in Africa is currently in use in 36 of the 47 countries in Sub-Saharan Africa and is used prominently throughout East Africa.

Mobile financial services (MFS) have become increasingly popular across the continent for many reasons. Many economists cite safety, efficiency, transparency, and ease of the services as reasons for the increased usage.

MFS include more than just cash transfers but have also expanded to utility bills, shopping, investment, taxes, and more. The services have also allowed easier cash flow across borders and between family members in times of crisis, which economists have cited as major motivators in service usage in the region, according to a report in All Africa.

One of the most prominent mobile money services in the region, M-PESA, was developed in Kenya. Since 2007, Safaricom and Vodafone’s M-PESA application has allowed users in Kenya and beyond to store funds on their mobile devices in order to transfer funds to other users, pay bills, and make other purchases.

The country now tops the global charts, with 58 percent of its adults having mobile money accounts. Former Safaricom CEO Michael Joseph noted that mobile technology has been transformative for the informal business sector, which comprises about 70 percent of jobs in Kenya. This increase has been instrumental in helping surge GDP rates throughout the developing world.

The latest mobile money statistics indicate that users in East Africa have largely continued to shift GDP to be transferred via various mobile money platforms. According to All Africa, mobile transactions amounted to $45.75 billion for East Africa, comprising 32 percent of the region’s combined GDP.

This is a significant increase from the $4.86 billion transacted via mobile services in 2009, which only comprised 3.4 percent of the region’s GDP. In Zimbabwe, 45 percent of the country’s GDP is transacted via MFS.

In its 2014 State of the Industry Report, the Groupe Speciale Mobile Association (GSMA) stated that MFS are ingrained in the majority of developing markets, with over 250 mobile money services available across 89 countries.

In 2014, almost 300 million users were registered for mobile money accounts. 2014 marked 16 markets with more mobile money accounts than regular bank accounts, “indicating that mobile money remains a key enabler of financial inclusion.” Furthermore, as smartphone access increases, the GSMA expects MFS usage to continue to increase rapidly.

Because of the prevalence of MFS through non-bank providers throughout the region, government regulators are passing guidelines for mobile money service provision in order to allow better financial inclusion for all members of society.

While competition has grown steadily between bank and non-bank mobile money service providers, regulations like these aim to maximize the reach of the services to the widest audience possible. The GSMA report marks that 47 of the 89 markets with mobile banking have regulations to allow both banks and non-banking services to sustainably provide for their markets.

The GSMA outlined in its report that there are still obstacles in helping mobile money services achieve their full potential in the region. The report states, “Regulatory barriers, low levels of investment and lack of industry collaboration limit the ability for mobile money to reach scale.”

Despite these obstacles, economists widely expect mobile money to continue to grow in order to meet eager markets across the continent.

– Arin Kerstein

Sources: Africa Focus, All Africa, CommsMEA, GSMA, IT News Africa
Photo: Flickr

, , , ,

Services Addressing Wealth Inequality in Africa

Services Addressing Wealth Inequality in AfricaMore mobile phones than ever before have been making their way to countries in need and enabling financial inclusion, which is so essential to eliminating poverty.

In Africa, periods of drought can take a significant toll on communities that depend on their agricultural workers and cause widespread wealth inequality. Thanks to the distribution of mobile technologies, farmers can now open accounts.

Wired’s Marguerite McNeal reports, “In Kenya, a whopping 59 percent of the adult population actively uses mobile money services, with transactions of $2.2 billion per month”.

Also, out of the 89 countries in the world where money services are available, the greatest impact is being made in Africa where roughly 12 percent of adults now have mobile bank accounts creating greater financial stability.

World Remit

This money transfer company was the brainchild of Ismail Ahmed. The idea of World Remit came to him while at university. He was always having to travel long distances and pay fees to send money to his family in Africa. In 2010, World Remit became a reality.

“Subscribers send and receive payments directly on their phones, and pay far less in transfer fees — about 4 percent, compared to as much as 12 percent through a traditional service like Western Union.” This system allows for better transfer services and gives families greater income stability.

Tigo Wekeza

The 3.5 million customers that rely on Tigo Pesa money services can now receive interest on their funds through Tigo Wekeza. “Customers do not need to register separately in order to benefit and any returns due are paid directly into their Tigo Pesa wallet.

If a customer so chooses, they can nominate a nonprofit beneficiary instead.” Customers are offered interest rates between 7 and 9 percent, and no other financial authority has offered like provisions. President and CEO of Millicom, Hans-Holger Albrecht, commended the company on its extension of financial inclusion.

EcoFarmer

Since its 10 year recession, 70 percent of residents of Zimbabwe depend on agricultural workers for economic recovery. EcoFarmer is the first micro-insurance policy in Zimbabwe, and it ensures inputs against both drought and high rainfall.

“Using mobile money, subscribers pay 8 cents a day for 125 days and are guaranteed a harvest or at least $100 for every 10 kilograms of seed they plant, regardless of weather conditions.” Farmers also receive tips, such as technical information, market information, weather conditions, and so much more that they can use in order to produce the greatest yield.

Bima

Based in Stockholm, this insurance provider allows its customers in Ghana to register for life insurance at 2 cents a day and also manage risk to prevent financial instability all from mobile devices. Bima provides family care, hospital stays and more recently, telemedicine services.

“We believe that every consumer deserves choice, value and quality of service, regardless of their income level.” Also, this company doesn’t run on just technology. It also provides essential education for consumers, and more than 90 percent of registrations are made in person in order to prevent error.

– Anna Brailow

Sources: BIMA, Econet Wireless Zimbabwe, Millicom, Wired, World Remit
Photo: Flickr

, , ,

World Bank Encourages Overseas Hiring Online

World Bank Encourages Overseas Hiring Online
A recent effort by the World Bank has helped make overseas hiring feasible for many interested parties – and has driven a surge of employment in Africa.

Unemployment has always been a boogeyman of modern culture. Whether a fully-developed or an emerging market, no economy thrives when it has a high rate of unemployment. According to the U.N., the challenge of unemployment is growing by the year. In 2014, the number of unemployed passed 201 million people worldwide. A disproportionate number of these were women and young people just entering the workforce.

The internet could change that. Like almost everything else the internet has affected, the job market is a very different place now than it was only three or four years ago. Digital entrepreneurs are increasingly common, and small businesses have access to better tools and faster communication than was ever possible before.

Entrepreneurship is not always an option, however. Being a digital entrepreneur requires social networking, strong skill development and a market to work with. On the other hand, companies are often looking for new talent pools of employees.

A study supported by the Rockefeller Foundation and done in partnership with Dahlberg Consulting has recently resulted in a new service. The World Bank is now helping interested individuals and companies find global employees through a new online toolkit. Companies seeking new talent can look abroad for the perfect fit for their employees. Meanwhile, people with technology skills in developing countries can now find jobs that allow them to use their full capacities.

This new business model, called “online outsourcing,” has the power to catalyze new economic growth. It also has the potential to drive a new wave of economic inclusion and equality, as typically underrepresented groups can join the workforce.

The collaboration between the World Bank and the Rockefeller Foundation is part of the Rockefeller Foundation’s Digital Jobs Africa Initiative. The mission of the initiative is to create new, sustainable employment opportunities for youth in Africa and the skills training to match. This is all working toward the ultimate goal of positively impacting 1 million lives in Egypt, Ghana, Kenya, Morocco, Nigeria and South Africa.

So far, the collaborations have been a success. The partnership has enhanced digital job creation in Africa in a number of ways, including the development of an information technology park and capacity building for the digitization of public records in Ghana.

Africa’s economy and population are both growing at an unprecedented rate. By 2050, 400 million people under the age of 25 will need to be gainfully employed in order for the continent’s economic growth to be sustained. Initiatives like the partnership between the Rockefeller Foundation and the World Bank could be the key to success – both of Africa’s economy and of Africa’s youth. The job market is becoming truly global, and everyone will reap the benefits.

– Marina Middleton

Sources: The World Bank, The Rockefeller Foundation
Photo: Flickr

, , , ,

Africa’s Biggest Economy

nigeria_africas_biggest economy
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

Sources: BBC, USA Today, CNN Money, Investing

Photo: The Gaurdian