In 2014, following the first revision of Nigeria’s gross domestic product data in two decades, Abuja announced that its economy had overtaken South Africa’s as the largest in Africa. Using the rebased data, the International Monetary Fund (IMF) reported that that Nigeria’s economy grew at 12.7 percent between 2012 and 2013. Thereafter, there was some triumphalist rhetoric about the size and strength of the economy from personalities in then-president Goodluck Jonathan’s administration in the run up to the 2015 elections and among those promoting foreign investment in Nigeria. However, in 2016, reflecting the dramatic fall in petroleum prices and the value of the national currency, the naira, the IMF concluded that Nigeria’s GDP had fallen behind that of South Africa. The Economist noted that foreign investors are likely to be discouraged by the latest figures.
A clear-eyed August 22 editorial, Vanguard, an independent, national-circulating newspaper based in Lagos, argued that Nigeria’s economic was “never as strong as the 2014/15 rebasing of the GDP had portrayed.” Instead, Nigeria’s economy was “like a clay-footed elephant that could collapse under the slightest pressure. Thus, it took just a slide in oil revenue compounded by ineffective policy responses to it…to bring the elephant down.”
Among the home truths cited by Vanguard:
—Even when its GDP was higher, Nigerians were “almost four times poorer” than South Africans.
—Nigeria has been unable to exploit its domestic market because of low production capacity.
—Nigeria’s huge population is not sufficiently channeled into economic productive activity.
—Vanguard concludes that Nigeria must diversify its economy and develop local industrial production if it is to thrive.
Nigeria’s current population estimates are in the range of 187 million. A UN agency estimates that by 2050, the country’s population will be around 400 million, making it the largest country in the world. It is the current size of the Nigerian market, and its potential future size, that has fascinated investors. Yet, far from being a blessing, a huge population that is growing rapidly is a drag on national development when education, health, and other basic infrastructure is inadequate to engage it in productive activity.