By April Taylor
According to a recent article published by Yahoo News, Nigeria has now overtaken South Africa to become the largest economy in the African continent when measured by Gross Domestic Product (GDP). Nigeria’s new status is derived from a change made to the way the country’s gross domestic product is calculated which had remained unchanged since 1990. The numbers also catapult the country to 26th place among global economies according to Nigerian finance minister Ngozi Okonjo-Iweala. When GDP is broken down to a per capita figure, Nigeria ranks 121st among world economies.
An illustration of how drastically the revised GDP affected economic indicators is that the World Bank had estimated that the Nigerian economy had grown by $264 million in 2012, but when using the revised GDP, the Nigerian economy actually grew $453 million. One of the contributing factors to the change in calculations is the inclusion of production and consumption changes particularly in the communications and movie industry that were not part of the calculations from 1990. The mobile telephone sector was nearly nonexistent in 1990, and the Nigerian market represents the largest mobile telephone market in Africa, so this factor not being included did a great disservice to accurately portraying the growth and vitality of the Nigerian economy.
The new calculations should encourage investors to take more of an interest in Nigeria’s economy according to economist Dennis Dykes. However, Dykes cautions that Nigeria’s per capita GDP is only $2,688 compared to South Africa’s per capita GDP of $7,508, and this means that Nigeria still has work to do in terms of making its economy more sound and successful than that of South Africa. Economists suggest that the newly released numbers should not be seen as a final step but rather as a basis for shaping future policy as it seeks to improve infrastructure in a way that makes the economies growth tangible for individual members of its large population.