6 April 2014

Africa: So Long, Suckers! Nigeria Overtakes South Africa in the Race for Economic Supremacy


Having finally got its calculations right, Nigeria is now officially Africa's largest economy. What does this mean, exactly? Not all that much for Nigeria's long-suffering citizens, whose lives are not materially affected by a few rearranged numbers on a spreadsheet.

It's a bigger deal for South Africa, actually: not only have we lost our economic crown, but we're losing our diplomatic clout to Nigeria too.

For just about as long as I've been doing this job (going on three years now), Nigeria has been promising to re-base its GDP. This is something most countries do every few years, to make sure that GDP calculations remain relevant - economies change, after all, and GDP calculations must change too to reflect this (see here for a more detailed explanation of how and why GDPs are re-based).

Nigeria hasn't rebased its GDP since 1993, meaning that goods are valued according to 1990 prices. As well as undervaluing existing industries, the calculations failed to account for new industries like telecoms, aviation, music and film production (Nollywood, remember, produces more films per year than any other country).

This problem was identified long ago, but the fix never happened - bogged down by ...

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