Nigeria Projected to Surpass South Africa as Continent’s Largest Economy

By ABS Contributor | Published on March 7, 2013

LAGOS, Nigeria – The ever-expanding moonscape that stretches behind a wall holding back the Atlantic Ocean here will one day host a project designed to help anchor Nigeria as Africa’s biggest economy.

But if the ambitious plan to construct a new city on land reclaimed from the sea represents Nigeria’s future, it is one that will be outsourced. Nearly every aspect of it will be privately run, from electricity supply to security.

Economists expect Nigeria, already the continent’s most populous nation and largest oil producer, to overtake South Africa in terms of gross domestic product over the next several years, technically making it Africa’s biggest economy.

But the impressive-sounding title tells an incomplete story, and the Eko Atlantic new city project illustrates the contradictions in a country crippled by corruption and unable to provide basic services, but with vast potential that could indeed one day be realized.

“The more important thing is, fundamentally, you have a population of 165 million,” while South Africa’s is around 52 million, Bismarck Rewane, a respected economist and head of Lagos-based Financial Derivatives, told AFP.

“So even if you are the same GDP, your GDP has to be four times more –400 percent more than that of South Africa for you to have (roughly) the same income per capita.”

A recalculation of Nigerian GDP is the main reason it is projected to overtake South Africa. Nigeria’s economic output data is currently calculated using 1990 as the base year.

To come up with more accurate data, the new figures will use 2008, greatly boosting overall Nigerian GDP, which the World Bank put at $244 billion for 2011, compared with South Africa’s $408 billion.

The rebasing is expected to be complete in October, and economists are predicting a GDP boost of about 40 percent, which would put Nigeria within striking distance of South Africa.

Since Nigeria’s economy has been growing faster than South Africa’s – at an estimated rate of 6.6 percent for 2012 compared with 2.5 percent – the West African nation would then move ahead of its southern rival in subsequent years.

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