The new GDP showed that agriculture remains the leading contributor to the GDP with 21.97% or ($112.26bn) of the total $510bn, compared with $93.7bn in the old estimates. Manufacturing, which has been receiving greater attention from the government in the past few years, contributed 6.81% to the new GDP, equivalent to $34.8bn, while crude oil and natural gas contributed 14.4% or $73.56bn. The telecommunications sector, generally regarded as one of the fastest growing in the world, contributed 8.68%, equivalent to $44.3bn, up from $2.3bn in the non-rebased GDP.
Kale adds that the new GDP will give investors a true picture of the Nigerian economy. Okonjo-Iweala, who also assisted the team that worked on the rebased GDP, shares this view. According to the Minister, the fact that Nigeria has emerged the largest economy in Africa should give Nigerians a sense of pride. However, she admits that there is still work to be done.
She says: “With better information, we can see that our economy is more diversified than before. We need to work hard on infrastructure, governance, corruption and building a social safety net.”
Experts say these high-performing sectors that were not included in the previous calculation are now likely to attract more investments. This will ultimately impact positively on the economy in the long run. It will also improve perceptions about Nigeria and shift focus away from South Africa to the country.
What has not changed
While the revised GDP would no doubt enhance the nation’s image, analysts say nothing has really changed in terms of the socio-economic realities that the ordinary Nigerians face on a daily basis. For instance, it will not change the poor state of infrastructure in the country. Neither will it put more money in the pocket of the common man. The perceived high level of poverty in the country will also not change.
In March, the World Bank in March placed Nigerians among the poorest people in the world in terms on their position on the poverty index. All these have led to a spate of criticisms against Nigeria’s new economic status.
Nigerians are sharply divided on the expected benefits of the rebasing. While some believe it was long overdue, others say there is no reason to celebrate.
The president of the Institute of Chartered Accountants of Nigeria (ICAN), Kabir Mohammed, says the GDP rebasing will earn the country respect in the international community.
Mohammed said: “We have moved into our proper position. We have incorporated structures hitherto not considered. This is an opportunity for people who want to invest in the country to make the right decision and come in.”
But other stakeholders in the economy are not so impressed. Acting president of the Nigeria Labour Congress (NLC), Promise Adewusi, said: “An improved GDP will only be meaningful if it translates into improved living conditions for the ordinary Nigerian, which is not the case at the moment.
“Economic growth without jobs and food on the table means nothing in reality. As we commend the government for achieving the feat of economic rebasing, we urge it to ensure this figure translates into improved living conditions, job creation, revival of industries and improvement of internal and national security; for these will be the measurable indices and indicators of an enlarging and progressive economy.”
Similarly, Lagos State governor, Babatunde Fashola, said: “Size only matters if it is efficient size. If it is big, sub-optimal or inefficient, it really does not achieve the purpose. If you go to the streets and tell people that the nation’s economy has progressed, they will laugh at you.”
A tale of two ‘giants’
Nevertheless, the new GDP has rekindled the longstanding
rivalry between Nigeria and South Africa. Nigeria is often referred to as the ‘giant of Africa’ by virtue of its large population of 170m people, while South Africa with a population of 53m, held the title of Africa’s largest economy. But all that has changed as Nigeria has snatched the title from South Africa.
Interestingly South Africa is among the leading emerging economies in the world, the BRICS, comprising Brazil, Russia, India and China. Nigeria’s current status as the continent’s biggest economy, experts argue, should earn it a place in a club which would then morph into ‘BRINCS.’
Nigeria also belongs to MINT, another group of nations with strong economies. MINT stands for Mexico, Indonesia, Nigeria, and Turkey.
Paradoxically, South Africa itself has contributed a lot to
Nigeria’s GDP, through the massive investments of companies of South African origin: MTN Nigeria, Multi-Choice Nigeria, Tiger Brands, and Shoprite.