NIGERIA – According to data released by the United States Department of Agriculture, by 2030 Nigeria’s gross domestic product (GDP) will be over 1 trillion US dollars.
This is almost three times bigger than South Africa’s current GDP and the combined projected GDPs of Algeria, Egypt and Kenya, a CNBC report has said.
The report also revealed that South Africa will come in a close second with an estimated GDP of $860 billion in 2030. This suggests that South Africa is unlikely to reclaim its place as the biggest economy on the continent. A place it lost to Nigeria in 2014 – after the West African economy was rebased.
Since achieving democracy in 1994, South Africa’s economy has lagged behind other emerging economies. This can be attributed to several factors including: regular public and private sector strikes, insufficient power supply, lack of adequate leadership, its economic policies and infrastructural failures.
Nigeria, meanwhile, has been diversifying its economy and introduced several much needed infrastructural projects. However, while the people of Nigeria have not necessarily benefitted from the strength of the economy – it has been attracting investor attention whereas South Africa is fast losing out.
According to A.T. Kearney’s 2015 Foreign Direct Investment Confidence Index, South Africa has fallen out of the rankings from a position of 13th last year.
The sector which is expected to significantly boost Nigeria’s GDP is agriculture. In South Africa this will unlikely be the case because agriculture faces a number of challenges based on land reform policies in the country.
Other African countries that are expected to make significant strides include Egypt, Kenya, Algeria, Angola and Ethiopia.
Global investors and business leaders are focusing on Africa as the next frontier of growth and opportunity, assuming the role that Asia has played in the past 30 years. As in Asia, rapidly developing economies have the potential to lift millions of people out of poverty, contribute to global labour pools, and create a new consuming class.
Nowhere is this potential more apparent than in Nigeria, which is the largest African nation not only in population, but also in economic output.
Despite persistent poverty, the country has a rapidly growing consuming class. In the following pages, we describe how Nigeria can build on its recent success and ensure that in the coming decade growth is more inclusive so that more Nigerians can escape poverty and enjoy a decent standard of living.
According to McKinsey, Nigeria has the potential to expand its economy by roughly 7.1 percent per year through 2030, raising GDP to more than $1.6 trillion in 2030.
This could move Nigeria from being the 26th-largest economy today to a top-20 economy by 2030 and would potentially make it bigger than the Netherlands, Thailand, or Malaysia. Trade and infrastructure represent the majority of the growth potential, likely contributing about a third of GDP expansion through 2030.
In addition, we estimate that nearly 120 million Nigerians could move above the Empowerment Line and 70 million could be lifted out of poverty if growth can be made more inclusive than it has been.
Nigeria has just experienced historic presidential elections marking the first democratic transfer of power in this country.
The new president – Muhammadu Buhari – takes over the reins in a very sensitive moment as Nigeria faces multiple challenges including economic woes triggered by the oil price collapse.
Given the importance of oil to the economy and government revenues, Buhari will need to re-examine Nigerian oil policy in light of growing US light oil production and lower oil prices.