Despite the current difficulties that are penalizing its growth, Nigeria is again the main African economy. It detects the IMF World Economic Outlook October 2016 by inverting the data of last August, when the most populous nation in Africa had lost the first position to the benefit of South Africa.
Overtaking was determined from the recalculation of the Nigeria’s gross domestic product (GDP), which in June, while the South African rand appreciated against the major currencies, had introduced a system of flexible exchange rates devaluating the naira by 30%, thereby producing a decrease in GDP of about 150 billion.
New survey Washington’s Institute calculates the GDP of Nigeria to 415.08 billion dollars from 493.83 billion dollars in 2015, while South Africa dropped to 280.36 billion dollars from 314.73 billion dollars in 2015.
The IMF also predicted that the Nigerian economy will grow by 0.6% in 2017. A small percentage that will allow bringing the country out of recession officially declared. Also in the next year, an increase in consumer prices of 17.1% is estimated, while it is expected a further decline equivalent to 0.4% of the current balance.
In its assessment in general on Sub-Saharan Africa, the Bretton Woods institution was an increase of growth to more speed and cuts economic projections on African growth for the last quarter of 2016.
A data that reflects the difficult economic conditions affecting the major economies of the area, first Nigeria, where the revision of the negative projections was based on the progressive contraction of the economy.
A critical phase caused by various factors, among which we highlight the sharp decrease in the production of Nigerian crude, the shortage of foreign currency resulting from reduced oil revenues, the reduction of energy production and the decline in investor confidence.
In recent months, several predictions have been expressed as to when the country’s economy will come out of the recession. Optimistically, two weeks ago, the governor of the Central Bank of Nigeria, Godwin Emefiele, predicted by the end of this year, indicating that the rapid recovery would be favored by the new measures implemented by the monetary authorities and the federal government. Among which it is included the creation of a structural fund to attract private investment, improve internal productivity and stimulate economic growth.
Emefiele forecasts seem however refuted by the Moody’s credit rating, according to which Nigeria will be out of the current economic downturn only in 2017.
The news of the re-conquest of the economic supremacy in Africa by Nigeria has attracted the attention of analysts, who have appeared largely indifferent to the IMF survey, at least until indices of measurement will not be integrated with new parameters.
According to the Executive Director, Corporate Finance at BGL Capital Limited, Femi Ademola, “as it was not important that two months ago Nigeria was exceeded by South Africa, so little influence on its development that now is again the first economy in Africa”.
While acknowledging that the economic primacy could attract investors, Ademola stresses, “The indicators used for the purpose of statistics are the unemployment rate, GDP per capita, the level of inflation, the level of infrastructure development, internal productivity and stability the exchange rate.”
The financial analyst went on to state that “to increase the reliability of the survey should be included also other development indicators such as the level of school enrollment, access to health services and financing and the availability of basic goods such as housing. “For this, Ademola is very doubtful in thinking that on the basis of these parameters Nigeria is the first African economy”.
The IMF projections on the South Africa’s GDP remain unchanged due to the political uncertainty that is creating tangible difficulties in the introduction of new rules to encourage trade. In addition, the report noted that until next year the southern African nation would not record any recovery, because of the collapse of the raw materials price and the severe drought that struck it.
With Nigeria, also Angola, the second largest producer of oil in Africa, is strongly affected by the conspicuous decrease in revenue derived from oil exports. The GDP of the Portuguese-speaking country for this year is not intended to increase and will record a weak growth only in 2017.
Unlike the oil-exporting countries, the growth forecasts for countries that have more diversified economies, such as Cote d’Ivoire, Ethiopia, Kenya and Senegal, converge on a significant expansion equivalent to more than 5% in 2016.
In addition to benefit from the low price of oil, these countries recorded a significant increase in consumption and investment, noting that the excessive dependence on exports of raw materials or by economy individual sectors constitutes a decisive obstacle to development.
Despite the current difficulties that are penalizing its growth, Nigeria is again the main African economy. It detects the IMF World Economic Outlook October 2016 by inverting the data of last August, when the most populous nation in Africa had lost the first position to the benefit of South Africa.
