Nigeria: The Giant of Africa
Africa’s most populous country and second-largest economy is desperately trying to shed the image of corruption that has so tainted its reputation in recent years. While unemployment and poverty remain a big challenge, such concerns muddy the picture of a nation with immense potential.
International Monetary Fund figures show impressive increases in GDP, up by an estimated 6.2 percent in 2013 and a further 7.4 percent rise forecast for 2014. Oil is driving much of the growth, as high prices have pushed export earnings up to US$93 billion in 2012 and US$42 billion in the first half of 2013. However, this sector is not without its problems, namely a damaging trade in stolen oil that has fuelled violence and corruption in the Niger Delta, home of Nigeria’s oil industry.
The government has acknowledged the country’s over-reliance on oil, and wants to broaden the economic base to reduce vulnerability to volatile petroleum prices, and stimulate labor-intensive segments such as manufacturing and construction. Other notable industries are coal, tin, columbite, rubber, wood, hides and skins, textiles, cement, agribusiness (especially cocoa beans), chemicals, printing and steel.
Poor infrastructure continues to hinder progress, with power outages and inadequate rail and road networks. In a bid to improve reliability, the government has opened up tenders for power transmission and distribution, which should raise over half a billion US dollars.
Agriculture — which accounts for 40 percent of GDP is also highly underdeveloped, with most famers working small plots on a subsistence basis. Despite large tracts, rich arable land, Nigeria is still forced to import over US$11 billion food every year. Anxious to remedy this situation, agricultural production was ramped up by about 8 million metric tons in 2012, plans to spend about US$10 billion over the next few years, create around 3.5 new jobs agriculture and food-related industries.
Nigeria’s central bank says fastest growing segments are wholesale retail trade, telecommunications, where privatization has accelerated insatiable appetite mobile communication, well 100 subscriptions. An internet penetration level less than 30 leaves ample room further growth. Meanwhile, reforms country’s financial services sector have inspired rise savings pensions, although citizens do not yet account.
Average household consumption is expected to increase from US$950 in 2012 to US$2,260 by 2017, and Nigeria is expected to become the largest economy in Africa by 2015, overtaking South Africa. Indeed, an ongoing reappraisal of the size of its GDP may even see this date brought forward.
Its young working-age population substantial natural resources make excellent target finance form private equity, venture capital or microfinance. Even blight corruption be overstated. The Economic Financial Crimes Commission (EFCC) anti-agency making strides enhancing good governance accountability, while helping reduce fraud, waste corruption. These factors combined suggest that ‘giant Africa’ will soon become a living name.