Nigeria has overtaken South Africa to become Africa’s biggest economy. This has the potential to dramatically shift perceptions of the continent. The last time Nigeria calculated its GDP was in 1990 and the new report highlights the importance of new industries such as e-commerce and telecommunications. Figures for 2013 released from Nigeria’s statistics bureau put the country’s GDP at $503bn. South Africa’s GDP is estimated to be $350bn. This is a new estimate of Nigeria’s GDP, previously the World Bank had estimated it in 2012 at just over $400bn. However, all are agreed that Nigeria is fast outpacing South Africa.
This dramatic rise has partly been put down to the success of Nigeria’s movie industry, known as “Nollywood” and the country’s focus on communications. Nigeria has the largest mobile phone market in Africa, with over 125 million subscribers. The large share of the mobile market is due mainly to Nigeria’s large population. With almost 170 million people living there, Nigeria is more than three times the size of South Africa. The economy appears to be fast outpacing the rest of Africa and global investors and economists continue to highlight Nigeria as the next “big boom investment”. Just before the figures were released, the Nigerian information minister, Labaran Maku, is reported as saying:
For the first time in 15 years, we will know, scientifically, what the GDP figure is and what the contributions of every sector to the economy are. We will also be able to know the sectors that have made the most progress and which ones are lagging behind.
After the release of the data the influence of new technology can be plainly seen with the mobile market standing out. This means that when considering the use of mobile phones in development, as we at engageSPARK are particularly interested in, the Nigerian market will have a significant influence in Africa.
However, Nigeria does still have many challenges to overcome, which may put off potential investors. The majority of the population lives in poverty and the poor infrastructure of the country is not likely to excite investors. The roads in particular are in a terrible condition and the electricity supply across the country is inconsistent, as Nigeria is unable to offer a stable supply. Although on paper Nigeria is booming, it may still be some time before investors abandon South Africa in favour of it.