Guardian

GOING by opinions of experts, there are indicators that Nigeria may overtake South Africa in its Gross Domestic Product (GDP) in 2018, two years to 2020, which Nigeria targets as the year to join the group of 20 most industrialised economies of the world.

Otherwise, the expected leap to the league of the industrialised economies may only materialise in 2030, when its GDP would be $977 billion, about 32 per cent higher than that of South Africa, the current biggest economy in Africa.

Much of the growth anticipated in favour of Nigeria will be led by the non-oil sector; as many of the conferees expressed confidence that Nigeria could be the next global investment hub if its challenges were properly managed.

Razia Khan, head of research for Africa at Standard Chartered Bank, who spoke at the Nigeria Development and Finance Forum (NDFF) conference in London, the United Kingdom, painted this robust growth for the Nigerian economy.

According to Ms Khan, who spoke on Nigeria and Comparative Analysis of Sub-Saharan Africa’s (SSA) Frontier Emerging Markets, “in less than two decades from now, the size of the Nigerian economy would be more than three times the size of Angola’s GDP.”

“By then, Angola — the second largest oil exporter in Africa after Nigeria — would have become SSA’s third largest economy. The other fastest-growing frontier economies of Africa — Ghana, Kenya and Ethiopia — would each become less than 30 per cent of Nigeria’s GDP.”

Still, a simulation by Standard Chartered Bank, as presented by Khan, shows that if Nigeria’s GDP were properly rebased, it would overtake South Africa’s economy as early as 2018.

This prospect is brightened by the fact that Nigeria is the biggest growing economy in Africa on the back of a favourable demography with prospect of becoming the fourth world largest, only behind India, China and the United States by 2050.

Much of the growth anticipated in favour of Nigeria will be led by the non-oil sector, even as many of the conferees expressed confidence that Nigeria could be the next global investment hub if its challenges were properly managed.

Another speaker at the conference and Managing Director/CEO of the bank, Mr. Robert Orya, listed several incentives Nigeria has put in place to encourage foreign investors.

Among these is the 100 per cent of foreign ownership of businesses, which makes Nigeria one of the most liberal economies in the world, in terms of capital control.

However, the rosy projections for Nigeria will depend on whether the country is able to address the poor state of public education facilities, fix infrastructure, tackle insecurity and fight corruption “in a manner that sends a positive signal to the international market.”

Indeed, the Development for International Department Trade Advisor to the Federal Government and Lead Consultant to the Economic Community of West African States (ECOWAS), Dr. Ken Ife, downplayed the optimism for a fast-rate growth for the country.

Ife agreed that Nigeria offers adequate market, considering its demography, and other potentials that would sustain any volume of investment; and that its economy would exceed South Africa’s if the informal sector were properly drafted into the GPD computation.

But he noted that the country’s borders were among the worst business hostile in the world, thus losing billions of dollars to trade barriers yearly.

He referred to a recent survey, which ranked Nigeria 148th in trade-cross-border performance, stressing, “we cannot achieve anything meaningful unless we address trade barriers. The country currently loses $25b yearly to trade barriers.”

Ife said he had found out that there are 26 check points between Seme Border and Lagos in the day time, while the figure doubles in the night.

“And World Trade Organisation (WTO) says such points should not be more than three. You spend more money and time when checkpoints are too many,” he said.

The NDFF conference (a Nigerian investment market stimulating forum) was first held in the United Kingdom in 2008 and sponsored by Financial Nigeria International Limited.