E-Financial
Nigeria, Others Account for half of Africa’s Economy — World Bank
Nigeria, South Africa and Egypt account for about half of the African economy says new data released by the World Bank Group last week.
The report which ranked global economies on the basis of the strength of their currency said that China will overtake the United States of America by the end of 2014 as the largest economy in the world.
The report said that low income economies, as a share of world GDP, were more than two times larger based on Purchasing Power Parity, PPP, than respective exchange rate shares in 2011.
Yet, these economies accounted for only 1.5 per cent of the global economy, but nearly 11 per cent of the world population. Roughly 28 per cent of the world’s population lives in economies with GDP per capita expenditures above the $13,460 world average and 72 per cent are below that average.
The International Comparison Program (ICP) which released the new data said that the world economy produced goods and services worth over $90 trillion in 2011, and that almost half of the world’s total output came from low and middle income countries.
Six of the world’s 12 largest economies were in the middle income category (based on the World Bank’s definition). When combined, the 12 largest economies account for two-thirds of the world economy, and 59 per cent of the world population.
The PPP-based world GDP amounted to $90,647 billion, compared to $70,294 billion measured by exchange rates. Middle income economies’ share of global GDP is 48 per cent when using PPPs and 32 per cent when using exchange rates.
The approximate median yearly per capita expenditures for the world – at $10,057 – means that half of the global population has per capita expenditures above that amount and half below.
According to the report, the six largest middle income economies are China, India, Russia, Brazil, Indonesia and Mexico which account for 32.3 per cent of world GDP, whereas the six largest high income economies are United States, Japan, Germany, France, United Kingdom, and Italy which account for 32.9 per cent.
Asia and the Pacific, including China and India, account for 30 per cent of world GDP, Statistical Office of the European Communities (Eurostat) – and the Organization for Economic Cooperation and Development (OECD) – 54 per cent, Latin America – 5.5 per cent (excluding Mexico, which participates in the OECD and Argentina, which did not participate in the ICP 2011), Africa and Western Asia about 4.5 per cent each.
China and India make up two-thirds of the Asia and the Pacific economy, excluding Japan and South Korea, which are part of the OECD comparison. Russia accounts for more than 70 per cent of the CIS, and Brazil for 56 per cent of Latin America.
The report stated that going by the Price Level Index (PLI) which is the ratio of a PPP to a corresponding exchange rate, the most expensive economies in GDP terms are Switzerland, Norway, Bermuda, Australia and Denmark, with indices ranging from 210 to 185.
The United States ranked 25th in the world, lower than most other high-income economies, including France, Germany, Japan, and the United Kingdom.
Twenty-three economies are showing a PLI of 50 or below. The cheapest economies according to the report, are Egypt, Pakistan, Myanmar, Ethiopia and Lao People’s Democratic Republic, with indices ranging from 35 to 40.
Which countries are the richest and poorest in per capita terms?
According to the World Bank, the five economies with the highest GDP per capita are Qatar, Macao SAR, China, Luxembourg, Kuwait, and Brunei.
The first two economies have more than $100,000 per capita. Eleven economies have more than $50,000 per capita, while they collectively account for less than 0.6 per cent of the world’s population. The United States has the 12th highest GDP per capita.
Eight economies – Malawi, Mozambique, Central African Republic, Niger, Burundi, Congo, Dem. Rep., Comoros and Liberia – have a GDP per capita of less than $1,000.
Which countries devote the most spending that directly benefit individuals?
The World Bank report disclosed that “a general measure of material well-being of each economy’s population is measured better by actual individual consumption per capita.
It said that a measure of all expenditures in the economy that directly benefit individuals rather than by GDP per capita is more revealing of the impact of government policy on individuals.
By this measure, the five economies with highest actual individual consumption per capita are Bermuda, United States, Cayman Islands, Hong Kong SAR, China, and Luxembourg, respectively. The world average actual individual consumption per capita is approximately $8,647.
The report further stated that “at 27 per cent, China now has the largest share of the world’s expenditure for investment (gross fixed capital formation); followed by the United States at 13 per cent. India, Japan and Indonesia follow with 7 per cent, 4 per cent, and 3 per cent, respectively.
China and India account for about 80 per cent of investment expenditures in the Asia and the Pacific region. Russia accounts for 77 per cent of CIS, Brazil for 61 per cent of Latin America and Saudi Arabia for 40 per cent of Western Asia.
According to the report: “Under the authority of the United Nations Statistical Commission, the 2011 round of ICP covered 199 economies which is the most extensive effort to measure Purchasing Power Parities (PPPs) across countries ever.”
ICP 2011 estimates benefitted from a number of methodological improvements over past efforts to calculate PPPs.
The ICP’s principal outputs are PPPs for 2011 and estimates of PPP-based gross domestic product (GDP) and its major components in aggregate and per capita terms. When converting national economic measures (e.g. GDP), into a common currency, PPPs are a more direct measure of what money can buy than exchange rates.
ICP implementation was led and coordinated by the ICP Global Office, hosted by the World Bank, in partnership with regional agencies overseeing activities in eight geographic regions: Africa, Asia and the Pacific, Commonwealth of Independent States (CIS), Latin America, the Caribbean, Western Asia, Pacific Islands, and the countries of the regular PPP program managed by the Eurostat and OECD).
In addition, two “singleton” economies, Georgia and Iran, participated in bilateral exercises with partner economies, without being part of any regional comparisons.
Money lost to fraud in Nigeria’s banking system has nearly tripled over the past five years, according to an analysis released by the Nigeria Inter-Bank Settlement System (NIBSS).
NIBSS estimated that N52.3 billion was lost to fraud in 2024, compared to 11.6 billion in 2020.
The report also indicated that fraudsters illegally attempted to obtain N86.4 billion in 2024.
These figures were reported shortly after the latest GDP statistics showed a fourth-quarter growth of 3.8 per cent, the highest rate in three years, primarily fueled by the services sector, which includes finance and insurance.
Nigeria’s digital payments system is considered one of the strongest in Africa, and tech startups in the nation secured approximately $400 million in funding in 2024.
Such financial services have gained greater significance recently due to a cash shortage and currency reforms, which have driven more users to abandon physical banknotes.
“The amount lost to fraud has increased over the past five years along with the growth of financial transactions in the digital payments sector,” NIBSS said.
Reports indicated that fraudsters are employing various tactics, including the conversion of funds into gift cards and the establishment of accounts using the stolen identities of elderly individuals, minors, and foreigners.
The report suggested that N400 million had been deposited into accounts created with the stolen identities of senior citizens.
NIBSS noted that some funds have been retrieved, and bank employees involved in the fraud are under investigation.
Nigeria is classified as a “grey list country” by international watchdogs, alongside nations such as South Sudan, Bulgaria, Monaco, and Croatia, due to weaknesses in its measures against money laundering and financing terrorism.
Economic and Financial Crimes Commission (EFCC) has also apprehended multiple foreigners concerning internet fraud. In December, the agency took into custody 792 suspects in the upscale Victoria Island region of Nigeria’s central city, Lagos.
According to the agency, at least 192 suspects were identified as foreign nationals, with 148 being Chinese.
Dele Oyewale, spokesman, EFCC, said in a press release that foreign criminal organizations recruit Nigerian partners to target victims online through phishing schemes, primarily focusing on individuals in the United States, Canada, Mexico, and various European nations.
MTN Group Fintech, described as Africa’s leading mobile financial services provider, has appointed Network International, an enabler of digital commerce across the Middle East and Africa (MEA), as its partner for Payment Processor – Issuing.
This partnership, said that the two companies, marks a significant extension of Network’s portfolio of issuer processing collaborations throughout the African continent.
The partnership will focus on rolling out card issuance products across key MTN Fintech markets, starting with Rwanda which is already operational.
Soon, Uganda, Cote d’Ivoire and Nigeria will also be covered by this collaboration.
Network International says it will provide a comprehensive range of services, including transaction processing, card management and online fraud prevention.
It added that MTN Fintech users will benefit from a seamless experience accessing both traditional mobile services and innovative digital payment solutions.
With a footprint spanning over 50 countries and serving over 250 financial institutions, Network International said that it brings its expertise to a partnership that will enhance MTN Fintech’s cutting-edge mobile services and provide even greater value to stakeholders and customers across Africa.
MTN Group provides voice, data, fintech, enterprise wholesale and API services to more than 288 million customers in 14 African markets.
Dr. Reda Helal, group managing director – Processing, Africa and Co-Head Group Processing at Network International said: “Our collaboration with MTN Group Fintech marks a major milestone for our outsourced payments services in Africa. It demonstrates our ability to successfully serve mobile network operators via our fully-fledged processing solutions and our continued dedication and commitment to the African region.”
Cedric N’guessan, executive for Payment and E-commerce at MTN Group Fintech, added: “This collaboration with Network International is pivotal in enhancing financial inclusion across Africa and beyond. It enables our customers to actively engage in the global economy, aligning perfectly with our strategic goals alongside Mastercard to broaden access to digital financial services across the continent.”
The Nigeria Deposit Insurance Corporation (NDIC) has emphasised the need for greater collaboration with legal professionals to enhance the liquidation and debt recovery processes following bank failures.
Bello Hassan, Managing Director/Chief Executive Officer, stated this while speaking at the sensitisation seminar for external solicitors in Lagos.
He highlighted the role of external solicitors in ensuring the smooth resolution of failing financial institutions, particularly in the aftermath of Heritage Bank’s collapse.
Hassan, who was represented by Henry Fomah, the Head, Legal Department, NDIC, noted that bank liquidation is inherently tied to litigation, requiring extensive legal expertise to recover debts, resolve creditor claims, and maximise asset realisation.
He said: “The recent failure of Heritage Bank, highlighted the intricate nature of bank liquidation and the vital role of collaboration with our external solicitors. Liquidation, by its nature, is intertwined with litigation.
“The NDIC, in fulfilling its responsibilities, engages in legal proceedings both as plaintiff and defendant, representing the interests of depositors and creditors while also pursuing debt recovery from debtors of closed banks. The recovery of these debts and the realization of assets are crucial to achieving our corporate objectives.
“Beyond paying the insured sums to depositors from the Corporation’s deposit insurance funds (DIF), the NDIC is as liquidator is also obligated to settle uninsured portion of deposits and all legitimate creditor claims from the realised assets of the insured institution in-liquidation.
“I am pleased to report that the Corporation has consistently fulfilled this responsibility, a success largely attributable to our collaborative partnerships, including the invaluable contributions of our external solicitors. While we acknowledge the challenges some of you have encountered during litigation, we urge you to continue your diligent efforts in assisting the Corporation with debt recovery and asset realization.
“The NDIC deeply values its stakeholders as essential partners in achieving its corporate objectives. We actively seek your continued collaboration and support in promoting financial system stability through a deeper understanding of the dynamics of the Deposit Insurance System in Nigeria. The consistent support we have received from our external solicitors is evident in the impressive attendance and active participation at previous seminars.”
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