At the USDA’s projected rate, Nigeria’s Gross Domestic Product (GDP) would have surpassed the $1 trillion mark by 2030, making it the first African country with an economy larger than $1 trillion.
With a current annual GDP of about $500 billion, Africa’s largest economy – now ranked 27th in the world — is projected to rise to 19th, ahead of Belgium, Netherlands, Sweden, Norway and Austria by 2030. But at 19th position globally, Nigeria’s economy will still rank behind Russia, Turkey and Mexico.
According to Bloomberg, by 2030, Nigeria will rank among the top 20 largest economies in the world.
Nigeria’s economy has been growing at a breathtaking rate approaching 7 percent in the last few years. The economy grew 6.6 percent in 2012, hitting 7 percent in the fourth quarter of that year, and 6.8 percent in 2013, compared with the relatively sluggish growth rates of the U.S. economy — 2 to 2.5 percent — in the years after the global financial crisis of 2007-2008.
China remains the world’s fastest growing economy, posting an impressive 7.3 percent growth in the fourth quarter of 2014. China is expected to slow to 7 percent in 2015, according to Bloomberg.
Although, much of the recent growth in Nigeria’s economy was due to favorable oil prices, many analysts see the recent slump in crude oil prices as providing impetus for a quickening of the pace of other sectors of the economy, such as the already fast growing telecommunications sector, the booming films (“Nollywood”) industry, as well as the light manufacturing sector — plastics, textiles and food processing industries — which has seen considerable growth recently.
Nigeria’s $56 billion agricultural sector remains the major source of employment for about 70 percent of the population and accounts for about 24 percent of GDP, second only to the oil sector.
Charles Robertson, global chief economist at Renaissance Capital, told CNN, “A lot of Nigeria’s growth will come from agriculture; and services are huge in Nigeria.”
While many, including this Digital Journal analyst, believe that the USDA projection of 7.92 percent GDP growth rate in the next 15 years is unduly optimistic, Robertson says the projection has likely underestimated the growth potentials of Nigeria’s economy. He believes that the country’s GDP could easily surpass the $1 trillion mark before 2030, pointing to the “explosive” growth of “banking, retail, telecoms and Nollywood” in recent years.
Nigeria officially overtook South Africa as the continent’s largest economy after the government of President Goodluck Jonathan rebased the economy in 2014. The country’s annual GDP for 2013 was revalued at $509.9 billion, placing it ahead of South Africa — formerly ranked the Africa’s largest economy — with a GDP of $469 billion.
An economy of with a gross domestic output of $1 trillion would seem unimpressive by the standards of the world’s largest economies. The US economy, for instance, would have grown to $24.8 trillion by the time Nigeria hits $1 trillion in 2030, while China’s GDP, currently about $11.2 trillion, would have nearly doubled to $22.2 trillion.
By 2030, India’s annual GDP is expected to have reached $6.6 trillion, making the country the third largest economy in the world.
But despite the emphasis on GDP, the most important macroeconomic index to note about Nigeria is not the absolute size of the economy or the projected size in 2030, but the growth rate of the economy. Nigeria’ finance ministry’s original growth projection for 2015 was 6.4 percent, according to Nigeria’s Vanguard. But the ministry marked down the projection to 5.5 percent following the crash in oil prices. And despite Bloomberg’s relatively conservative projection of 4.9 percent — also based on the projected impact of falling oil prices and uncertainties about political instability at the time –Nigeria still ranks the sixth fastest growing economy in the world.
Nigeria’s growth rate is outstripped on the African continent only by Kenya, currently ranked the third fastest growing economy in the world, and the fastest among the emerging class of African economies that global analysts have dubbed the “African lions,” after the late twentieth century “Asian tigers.”
Overall, the countries that will make the biggest economic gains worldwide in the next 15 years are the “African lions.”
The list of emerging African economies dubbed the “African lions,” include Angola, the fifth largest African economy with a projected GDP of $226 billion by 2030; Algeria, ranked fourth, with a projected GDP of $330.7 billion by 2030; Egypt, ranked third, with a projected GDP of $471.5 billion by 2030, and South Africa, the second largest, is projected to nearly double its current size and reach $810.6 billion.
Nigeria, with a population of more than 170 million, tops the list, projected to surpass the $1 trillion mark by 2030.
Other notable African economies are Ghana — with a population of only about 26 million — projected to reach $101.4 billion in 2030, making it the continent’s tenth largest, and Kenya, with a population of about 45 million, projected to reach $107.5 billion.
Unfortunately, aggregate GDP figures do not tell the entire story because they do not reveal the extreme inequality of wealth distribution that persists even as African economies grow at a fast rate.
Visitors to Lagos whose picture of Africa is based on stereotypes of African poverty, will be dazzled by eye-popping display of global one-percent standard of wealth among Nigeria’s elite classes in wealthy urban and suburban districts of Victoria Island, Ikoyi and Lekki Peninsula. They will also be impressed by the glaring evidence of middle class prosperity in the surrounding sprawl of suburban districts. But a trip outside the major urban centers could quickly dispel the illusion of overall wealth and grandeur.
