07 April 2014, Abuja – Nigeria’s economy surpassedSouth Africa’s as the largest on the continent after the West African nation overhauled its gross domestic product data for the first time in two decades.
The size of the economy is estimated at 80.3 trillion naira ($491 billion) for 2013, Yemi Kale, head of the National Bureau of Statistics, said, Sunday at a news conference to release the report in the capital, Abuja. That compares with the World Bank’s 2012 GDP figures of $262.6 billion for Nigeria and $384.3 billion for South Africa.
The NBS recalculated the value of GDP based on production patterns in 2010, increasing the number of industries it measures to 46 from 33 and giving greater weighting to sectors such as telecommunications and financial services.
While the revised figure makes Nigeria the 26th biggest economy in the world, the country remains behind in income per capita, ranking 121 with $2,688 for each citizen, according to Finance Minister Ngozi Okonjo-Iweala. “With better information we can see that our economy is more diversified than before,” she said, citing contributions by services and telecommunications.
The figure exceeds forecasts from London-based Renaissance Capital, which predicted in December that the revision will boost the size of the economy by as much as 60 percent to between $384 billion and $424 billion.
Nigeria, a country of about 170 million people, is an OPEC member and Africa’s biggest oil producer. The government is targeting 7.16 trillion naira in income from oil and gas this year.
“Rebasing does not change what was already there, it’s just about measuring better and more accurately,” Kale said. “It does not mean that within 24 hours something miraculous has happened.”
While Nigeria’s economy has grown by at least 6 percent a year since 2006, according to the World Bank, the most recent poverty survey by the NBS shows that 61 percent of Nigerians were living on less than a dollar a day in 2010, up from 52 percent in 2004.
Though the revised economic data saw Nigeria’s 2012 debt-to-GDP ratio decline to 11 percent from the 19 percent projected with the old figures,the country will not change its debt policy and borrow more, Okonjo-Iweala said.
Getting the data right is the first important step to ensure that “economic policy can be better and more correctly targeted,” Gene Leon, resident representative of the International Monetary Fund, said at the news conference.
“It is also a notable milestone for Nigeria to overtake South Africa as the continent’s largest economy,” Africa Finance Corp. Chief Executive Officer Andrew Alli said in an e-mailed response to questions. “At the same time, Nigeria’s population is three times the size of South Africa, which means that on a per-capita basis, it still has much ground to make up.”
President Goodluck Jonathan’s government is struggling to quell an Islamist insurgency in the partly arid north, where Amnesty International estimates more than 1,500 people have been killed this year. It is also grappling with rampant oil theft and allegations that the Nigerian National Petroleum Corp. has not accounted for billions of dollars of revenue, allegations the company denies.