Nigeria zoomed to the top of the list as Africa’s biggest economy over night – thanks to some smart mathematics.
Apparently, Nigeria outstripped South Africa’s when government economists changed the way they measured growth.
The new calculation immediately increased GDP by 89%.
However, the jobless rate among under 25s is reckoned at 75% while the real wealth of the oil-rich nation sits in the bank accounts of a privileged few.
Just when Nigeria really became the largest economy on the continent and whether it really is depends on how you calculate the figures.
No economic changes
The Nigerian statisticians pointed out that the way the government measured gross domestic product had not changed for nearly a quarter of a century. New and profitable income streams like telecoms, information technology, music, online sales, airlines, and film production were not included in the old calculation.
So the statisticians merely widened the net this month and propelled Nigeria to the top of the table.
So, GDP for 2013 amounted to £307 billion, compared to South Africa’s £221 billion.
Despite the massive hike, some economists point out that was a well performing per capita economy in Nigeria is now considerably underperforming when the new rules are applied,
Although South Africa has been beaten back into second place, the country has a population of fewer than 52 million compared with Nigeria’s 170 million.
The per head GDP for South Africa for 2013 becomes £4,250, while Nigeria’s is £1,795.
So what does rebasing the economy mean? Nigerian financial analyst Bismarck Rewane summed up rebasing the economy as vanity.
No one’s better off
“The people are no better off because we count the numbers a different way. The new figures do not put more money in the bank or more food in their stomach. Nothing changes.”
Most countries update the way their GDP statistics are counted every few years to take new industries rising and older ones falling away into account.
For instance, in 1990, Nigeria had a single telecoms firm with 300,000 lines and one airline.
Now, the nation has a vibrant technology sector with millions of mobile phone and internet users.
Reasons governments are keen to rebase GDP figures are generally when they are looking for foreign aid.
Governments, charities and organisations like the International Monetary Fund and World Bank like to see up-to-date GDP numbers that reflect an accurate picture of an economy.