7 January 2014

Nigeria to Wait 30 Years to Join 10 Largest Economies - Expert

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For Nigeria to join the ranks of the world's 10 largest economies, she has to wait 30 more years, renowned economist Jim O'Neill has said.

O'Neill in 2001 jolted the world to the prospects of Brazil, Russia, India and China emerging as potential powerhouses of the world economy. His prophecy that Nigeria could emerge the 20th largest world economy by 2025 caught President Olusegun Obasanjo's imagination so much so that he decreed that Nigeria would arrive the destination by 2020, hence the idea of Vision 20: 2020 that became the national mantra.

While the 2020 date has come under heavy criticism, leading observers of the nation's economic trends to conclude that significant development would come later than 2020, O'Neill is however not discouraged as he has now identified the "Mint" countries - Mexico, Indonesia, Nigeria and Turkey - as emerging economic giants, as distinct from Brics countries.

He asked, "So can the Mints join the top 10 largest economies in the world, after the US, China, the rest of the Brics and maybe Japan? I think so, though it may take 30 years."

The soothsayer's new tale rests on four planks. First, the four Mint countries have relatively large populations in common; this is expected to provide local demand for rising outputs of goods and services. The relatively youthful populations as in Nigeria means a rise in the number of people eligible to work relative to those not working. O'Neill therefore believes that if Mexico, Indonesia, Nigeria and Turkey get their act together, some of them could match China-style double-digit growth rates in two decades.

Second, O'Neill quoted Mexican foreign minister Jose Antonio Meade Kuribrena as saying that they all have geographical positions that should be an advantage as patterns of world trade change. For example, Mexico is next door to the US, but also Latin America. Indonesia is in the heart of South-east Asia but also has deep connections with China. Turkey is in both the West and East. According to him, Nigeria's geographical location could become a key asset in the future if African countries stop fighting and choose to trade with each other.

"This might in fact be the basis for the Mint countries developing their own economic-political club just as the Bric countries did - one of the biggest surprises of the whole Bric thing for me. I can smell the possibility of a Mint club already," O'Neill stated

"What I also realised after talking to Meade Kuribrena is that the creation of the Mint acronym could spur pressure for Nigeria to become a member of the G20, as the other Mints already are.

"This was something the charismatic Nigerian finance minister, Ngozi Okonjo-Iweala, was keen to talk about: 'We know our time will come,' she said. 'We think they are missing something by not having us.'"

Thirdly, three of the Mints - Mexico, Indonesia and Nigeria - are commodity producers and only Turkey isn't. This contrasts with the Bric countries where two - Brazil and Russia - are commodity producers and the other two - China and India - aren't.

The soothsayer reports that his tour of the MINT countries changed his perception of the key development challenges confronting them. For instance he encountered Central Bank governor Sanusi Lamido Sanusi in Nigeria who argued that corruption rarely prevents economic development - and that the growth of the economy, accompanied by improvements in education, will lead to better governance and greater transparency.

He considered Sanusi's perspective important as an alternative to often simplistic Western way of thinking. "For many credible people in the MINT countries, corruption is a consequence of their weak past, not a cause of a weak future, and certainly not the number-one challenge. It falls way down a list compared with the costs of energy and the breadth of its availability and, of course, infrastructure," he observed.

O'Niell cites an amazing statistic indicating that about 170 million people in Nigeria share about the same amount of power that is used by about 1.5 million people in the UK with almost every business in Nigeria generating its own power. The costs are enormous."Can you imagine, can you believe, that this country has been growing at 7 per cent with no power, with zero power? It's a joke," he quoted Africa's richest man, Aliko Dangote, as saying.

O'Niell believes that Nigeria could grow at 10-12 per cent by sorting out this problem alone, doubling the size of its economy in six or seven years."

In terms of wealth, Mexico and Turkey are at about the same level, earning annually about $10,000 (£6,100) per head. This compares with $3,500 (£2,100) per head in Indonesia and $1,500 (£900) per head in Nigeria, which is on a par with India. They are a bit behind Russia - $14,000 (£8,500) per head - and Brazil on $11,300 (£6,800), but still a bit ahead of China - $6,000 (£3,600).

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