LAGOS (Reuters) - Nigeria’s economic growth figures will shoot up about 40 percent in the second quarter this year when Africa’s second-biggest economy changes the base year for its calculation to 2009 from the current 1990, a source close to the matter told Reuters on Wednesday.
Here are analysts comments on the planned rebasing:
“Perhaps the upside for Nigeria is that it will become too important to ignore as a frontier market and investment destination.”
“If confirmed, the 40 percent upward revision would bring Nigeria’s GDP to about $370 billion (229 billion pounds), just shy of South Africa’s output ($391 billion forecast for 2012), with the country subsequently becoming the largest economy in Africa within a year or two.”
“This will probably mark a symbolic turnaround on the regional geo-political scene, but may not change much in terms of actual leadership in sub-Sahara Africa. South Africa will certainly remain the dominant entity in the Southern African region and, to a lesser extent, in parts of the COMESA zone.”
“Nigeria is and will be the most influential member - but not undisputed leader - of ECOWAS.”
“Yet Nigeria remains significantly underdeveloped in terms of basic infrastructure (electricity, roads, etc) and faces very high income inequality. Output per capita in Nigeria will continue to trail that of South Africa over the next decades.”
RAZIA KHAN - HEAD OF AFRICA RESEARCH AT STANDARD CHARTERED
”Latest IMF data puts Nigeria’s GDP in current USD as $273 billion in 2012. South Africa’s (projected) 2012 GDP in US dollars is estimated at $420 billion. With rebasing, Nigeria’s economy comes closer to catching up. It becomes a $382 billion economy roughly and only 10 percent smaller than South Africa.
“But look at any metric estimating the size of the consumer market in South Africa and look for the comparable figure in Nigeria, the difference is far greater than 10 percent.”
“A 40 percent increase in nominal GDP would be consistent with the experience of other African countries, whose economies have typically been inflated by 30-60 percent as a result of similar re-basing exercises. Although there is a symbolic aspect to Nigeria’s ambition of overtaking South Africa, the market impact of a GDP revision is unlikely to be significant.”
“By the same token, while certain debt ratios will be flattered by the revision, to us the question of debt sustainability has always been about the government’s servicing capacity rather than the ratio of debt to GDP.”
Reporting by Chijioke Ohuocha; Editing by Tim Cocks