Dr Ngozi Okonjo Iweala, Minister of Finannce, during her address
Angry reactions have continued to trail the announcement that Nigeria’s economy is now bigger than that of South Africa following the rebasing exercise carried out by the National Bureau of Statistics, NBS, at the weekend.
The result of a long awaited rebasing of Africa’s most populous nation showed that Nigeria’s GDP of $453 billion in 2012 was higher than South Africa’s $384 billion.
With this development, South Africa’s economy now ranks second behind Nigeria. But this rating has not gone down well with Nigerians and some experts who have taken a swipe at Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala.
Those upbraiding her say it amounts to vainglory for Nigeria to lay claim to having an economy that is bigger than South Africa’s when all indices point to the contrary. They argued that the reality on ground is that Nigeria cannot generate up 4,000 megawatts of electricity whereas South Africa generates close to 40,000 megawatts, there is high rate of unemployment in Nigeria, many factories have shut down, Nigeria’s refineries are not functioning at full capacity and the country has to rely on imported petroleum products, the nation’s roads are death traps, and Nigeria is ranked as one of the poorest nations by the World Bank and other global agencies.
On social network site, Twitter, more Nigerians lambasted Okonjo-Iweala. They reckon that the calculations were only theoretical. To some economists, the rebasing was a vainglorious exercise.
“In one week, Nigeria moved from one of the poorest, globally, to largest African economy, did a miracle happen?” asked NewsBytes.
“Well, I hope our minister, Okonjo-Iweala’s humble enough to admit the new GDP numbers won’t magically improve our lives. Only means government has better data to work with,” said Gbenga Olorunpomi.
According to Ife Adebayo, Okonjo-Iweala should quit her position as Finance Minister. “Maybe Iweala should return to her World Bank/International Monetary Fund jobs and let someone who knows that cost of food, shelter and healthcare are what matter, take charge,” he said.
Just Jude thinks it was a media stunt by the government. “Nigeria has over 100 million poor persons. Dear Iweala, your media campaign won’t change that.”
Adelaja King believes there is nothing to rejoice about just yet. “What is worth celebrating in a house where the active youths are rendered vegetables labour wise? What is the sense in this concocted GDP propaganda?” he asked.
Miz Cazorla wrote: “GEJ, I personally can’t celebrate until we all can feel the positive impact of our growth. There are still too many of our citizens living in poverty.”
Loads of responses have also poured in on our website: www.pmnewsnigeria.com. Ola teased the government with this comment. “Largest economy when we cannot have three square meals, no electricity, no job for the youths, the pensioners are not getting their money, etc. Largest economy indeed..”
A reader that calls himself ‘At New Nigeria’ added that: “This is true. The largest economy in Africa that imports from developed economy toothpicks, bottled water, mushroom, egg, vegetable, underwears, cream. This projection is an academic long jump.”
Mallam Shehu was more direct in his approach. “Who is fooling who? MADAM ‘WAHALA’, stop fooling yourself because Nigerians are wiser than you think.”
Rufus believes the economic calculations is a ruse. “How is this measured? What is economy or what is the use for this big title for a hungry, hopeless people? We should stop deceiving ourselves with all these vague achievements without the reality.”
Rex Okoye, while reacting to the rating online, said: “I said it earlier that since the other socio-economic indices of economic growth and development apparently measured zero, this new Nigerian economic position in Africa amounts to nothing. Nigerian government as a matter of fact should ignore the vain glory that may soon follow the announcement and focus on the reality of improving the standard of living of Nigerians through systematic development of the basic infrastructure that gives real meaning to life. A word is enough for the wise.”
Callers on Rythm 93.7 radio programme monitored in Lagos, southwest Nigeria, Monday morning, laughed off the rating, saying it was a joke, considering the downward slide of the nation’s economy and the myriads of problems buffetting the country.
South African economists insist their country remains the most important economy in the continent despite being overtaken by Nigeria as Africa’s biggest.
“South Africa will remain one of the important economies of the continent, though this rebasing will be a significant step in establishing Nigeria as a true African powerhouse,” said Investec portfolio manager, Roelof Horne.
Nigeria, with 170 million people, is about three times the size of South Africa by population, but it’s economy is still battling challenges such as poor infrastructure that hampers business activity.
The new statistics included the contribution of the fast-developing sectors such as telecoms, music and film industry, known as Nollywood.
Economist Dennis Dykes, at South Africa’s Nedbank said Nigeria’s new position as Africa’s largest economy should be “viewed positively”.
“It’s important that economies were measured accurately…it gives potential investors a good picture of activity,” he said.
“The news figures should help South African investors identify new opportunities in Nigeria, especially in areas that were previously not factored in.”
Dykes said South Africa’s $7,508 GDP per capita, higher than Nigeria’s $2,688 was still the most important measure of the economy.
“Being Africa’s number one is definitely a great confidence booster for Nigeria, but it won’t change much,” he added.
Dr. Yemi Kale, statistician-general, National Bureau of Statistics said the figures should not be seen as an end in themselves but should be used to help the government shape policy for the future.
The next rebasing was planned for 2015, with the results out in 2016, he added.
Bismarck Rewane, the head of the Lagos-based Financial Derivatives Company said the exercise could only be meaningful “if it impacts positively on the living standards of the people”.
“Nigerians will still buy petrol at the same price, they will still have the same amount in their pockets, electricity is not going to improve on Monday morning,” he said.
“So, the exercise is a journey from reality to vanity,” he added.
South Africa will continue to remain the most competitive economy, despite Nigeria’s new status, he added.
For ordinary Nigerians — most of whom still live on less than $1.2 cents a day — the rebasing is likely to have little effect, but it will improve the country’s balance sheet and its credit rating and promote it from being a low-income economy.
Nevertheless, Nigeria still faces an immense challenge in terms of infrastructure deficits. Slow ports, bad roads and a lack of electricity are some of the major factors hampering business activity.
South Africa has been hit by slow economic growth since the 2008 global recession, its growth lagging behind many of the world’s developing economies.
This year, the World Bank revised the country’s growth outlook to 2.7 percent, down from 3.2 percent, amid high unemployment.