Nigeria Economy Rebasing to Displace S. Africa, Renaissance Says

Nigeria’s plan to rebase its gross domestic production figures next year may boost the assessment of the size of its economy by as much as 60 percent, leapfrogging South Africa as the continent’s largest nation in terms of total wealth, Renaissance Capital Ltd. said.

Africa’s biggest oil producer may see its economy measured at between about $384 billion and $424 billion in 2014, according to projections by Charles Robertson, the London-based global chief economist at RenCap, in an e-mailed note to clients today. That would compare to about $370 billion for South Africa’s economy, he said.

Nigeria is updating its GDP base year to 2010 to give a better indication of the size and composition of its economy. The GDP of Africa’s most populous nation is currently based on production patterns in 1990. The schedule for release of the new GDP data has been been delayed several times this year with the figure set to be published by the country’s National Bureau of Statistics in February.

“The effect could be dramatic,” said Robertson. “Because a national census of business has not been done for 20 years, we expect a big rise in the number of businesses that the NBS can measure.”

The data may mean that Nigeria’s growth rate may slow to 5 percent to 6 percent, from a current 7 percent annual rate, he said. Even a revised per capita GDP from $1,700 to an estimated $2,400 will lag behind South Africa’s at $6,800, according to Robertson. Nigeria has about 170 million people while South Africa has a population of 53 million.

Nigeria’s economic growth over the past decade has not been inclusive enough and has fostered inequality in the West African nation, Finance Minister Ngozi Okonjo-Iweala said last month.

“This will not be easy to explain to the population,” Robertson said. “Rebasing does not mean Nigerians are better off – it just means they are better off than official statistics previously indicated.”

South Africa is the site of Africa’s biggest stock and exchanges and its electricity generation capacity is ten times that of Nigeria.

Before it's here, it's on the Bloomberg Terminal.