Nigeria Becomes 26th Largest Economy in the World

Nigeria has moved up 11 steps to number 26th largest economy globally ahead of South Africa, following the outcome of the reclassification of the based year of the Gross Domestic Product (GDP) from 1990 to 2010.

The country’s GDP increased by 75.58 per cent from $258.55 billion before the rebasing to $453.96 billion.

The new GDP places Nigeria ahead of countries like Austria with $394.7 billion; Venezuela with $381.26 billion as well as Columbia, Thailand, Denmark, Malaysia and Singapore among others which has $369.6 billion, $$365.96 billion, $$314.88 billion, $274.7 billion and $269.86 billion respectively.

On the continent, Nigeria now ranks number one ahead of South Africa which currently has a GDP of $384.3 billion.

The result of the rebasing of Nigeria’s GDP, the first in almost 25 five years, confirm that the country’s economy has grown in total value and undergone significant changes, including substantial diversification in May sectors especially in the last 10 years.

Dr Yemi Kale, statistician general of the Federation who announced the new GDP figures yesterday in Abuja, noted that the results reveal better diversification of the Nigerian economy than earlier reported.

One of the major changes identified is the noticeable shift in the share of key sectors to the country’s overall GDP.

An example is the decline in the share of agriculture sector which dropped to 24 per cent while the share of the Services sector rose to 50.2 per cent.

In the 1990 nominal series, agriculture contributed 30 per cent to the GDP while the industry contributed 46.1 per cent and services sector contributed 23.6 per cent.

According to Kale, even though agriculture is growing in terms of total value and jobs created, the rise in the contribution of services sector such as the telecommunications has led to the reduction of its contribution as a proportion of total GDP.

The implication of this, he said, is that Nigeria is moving towards a more service-oriented economy.

Speaking on the development, Dr. Ngozi Okonjo-Iweala, coordinating minister for the Economy and minister of Finance stated that with the recent exercise, “Nigeria’s estimated GDP in 2013 is N80.2 trillion or approximately $509.9 billion.”

As a result, Nigeria she said “has moved to be the largest economy by GDP size in Africa and has moved to be the 26th largest economy in the world, it notched 10 points up. On a per capita basis, Nigeria is number 121 in the world so we have the total GDP size of $2,688 per capita now and moved up from 135.”

Okonjo-Iweala however cautioned that “even though our GDP size is large in Africa and even to the world where we are number 26, if you divide it by the total number of our population we should not get carried away by the whole exercise.”

“The share of GDP of some sectors are now quite important. Manufacturing moved from 2 per cent to 7 per cent which is significant and telecommunications moved from a very low number of 1 per cent to 3 per cent. Nollywood moved from zero per cent to 1.2 per cent now and it was not being included in the GDP that was earlier measured as well as a lot of telecommunications services. A whole lot of services in the formal and informal sectors were excluded from our GDP and these have now been brought in in terms of measurement.”

This rise in services she said is not unusual for any economy and the fact that agriculture is now 22 per cent does not make it any less important. Agriculture she said is “still has a strong share of GDP and that is why we will maintain our focus.”

What this means Okonjo-Iweala added “is that what Nigerians have been wishing for, that is a more diversified economy is showing up in these numbers, with better information we can see that the economy is more diversified than before.”

She lamented that the share of oil and gas has dropped to about 15.9 per cent “but it is still an important sector of the economy as any sector with 10 per cent or more of the GDP is considered important to the economy but services is making a bigger mark.”

Government,  the finance minister said “will need to continue to support diversification of the economy and push harder and we need to continue to support agriculture, manufacturing because we have seen how it has grown with policies.”