Nigeria has declared itself the biggest economy in Africa. Overnight, with the wave of a statistical wand, it has added 89% to its GDP, now worth $510 billion, and soared past the previous leader, South Africa, worth $370 billion. Nothing has changed in Nigeria’s real economy, except the way it is measured. The GDP revision is not mere trickery. It provides a truer picture of Nigeria’s size by giving due weight to the bits of the economy, such as telecoms, banking and the Nollywood film industry, that have been growing fast in recent years. Other countries perform similar statistical magic—Ghana, for example, added 60% to its economy in 2010—though few wait two decades, as Nigeria inexcusably did, to update the national accounts. In Nigeria’s case, the new numbers confirm that it really is the colossus of the continent.
It is rich in resources, especially oil. It has aspirations to be the tech hub of Africa, boasting startups such as Konga and Jumia, budding Nigerian Alibabas. In other industries it has giants such as Dangote Cement, which plans to list in London—as a big oil firm, Seplat, did this week—and is likely to become part of the portfolio of many pension funds. Growing numbers of foreigners wanting to invest in Africa’s rise will buy Nigerian stocks; after Johannesburg, Lagos has the biggest, most liquid market in the region.
The country may be a giant, but it is still poor: Nigeria ranks 153rd out of 187 countries in the UN’s Human Development Index. Despite the rapid growth of recent years, unemployment remains high and the number of people in poverty has actually increased. Even with the revised figures, GDP per head is only $2,700. South Africans are more than twice as rich. Large parts of South Africa have a rich country’s infrastructure, Nigeria suffers from clogged traffic and chronic power cuts.
Nigeria’s growth rate is slipping—to perhaps 6.5% this year. To absorb the millions of young people pouring into the labour market, Nigeria requires sustained double-digit growth. Tax-collection is woefully inadequate; the bigger GDP number shows tax revenues to be even smaller as a share of the economy than previously thought. Corruption and the barriers to doing business are formidable, from bureaucracy and graft to port delays and murky land rights.