News / Economy

Nigerian Economy Gaining on Regional Heavyweight South Africa

A farmer plows the field in Saulawa village, on the outskirts of Nigeria's north-central state of Kaduna, May 2013 file photo. A farmer plows the field in Saulawa village, on the outskirts of Nigeria's north-central state of Kaduna, May 2013 file photo.
x
A farmer plows the field in Saulawa village, on the outskirts of Nigeria's north-central state of Kaduna, May 2013 file photo.
A farmer plows the field in Saulawa village, on the outskirts of Nigeria's north-central state of Kaduna, May 2013 file photo.
While South Africa remains the most appealing investment destination on the African continent, the economy of the continent's most populous nation, Nigeria, is growing quickly. A new survey from a major South African bank predicts that, within the next couple of years, Nigeria will be the most attractive country to investors.

For three straight years, South Africa has topped the "Where to Invest in Africa" survey done by Rand Merchant Bank, but this year the survey predicted the West African nation of Nigeria may overtake South Africa within the next two to four years.
 
Nigeria is currently the leading African oil producer.
 
The survey takes several metrics and surveys from other economic organizations into consideration.

South Africa retained first place this year, while Nigeria moved from third to second place, ahead of Egypt. The survey is meant to give investors a long view of investment in the country. Countries like Libya and Egypt, though currently facing unrest, are also included in the top 10 among African countries.

Nema Ramkhelawan-Bhana, an Africa analyst with the South Africa-based Rand Merchant Bank, said, "the scoring gap between South Africa and Nigeria is narrowing quite rapidly."
 
"Now one would argue that Egypt has fallen down a couple of places because of its political unrest, but that's not necessarily the case based on our ranking. It is in fact because of Nigeria's expeditious growth rates and also its growth in market size with the potential to actually overtake South Africa in the next couple of years," continued Ramkhelawan-Bhana.

Nigeria has also made huge gains in the world rankings, climbing 35 places in the last decade to come in at 38th place. South Africa came in at 33rd place this year.

Ramkhelawan-Bhana says Nigeria already has a gigantic market thanks to its 164 million residents, and with growth in sectors like technology and agriculture, Nigeria is diversifying away from its historic dependence on oil.

That growth is likely to be bolstered further when Nigeria rebases its Gross Domestic Product, or GDP, by the end of the year.

Rebasing helps governments to adjust GDP calculations for changes in the economy, including new sectors and industries. Ghana recently rebased its GDP figures and the country's market size increased by 60%. Nigeria hasn't rebased in 17 years. The possible growth of such a rebasing has analysts excited.

"Now Nigeria's economy is about two-thirds the size of South Africa. Imagine an increase of around 60%. It will far exceed the levels that we are seeing in South Africa at the moment," said Ramkhelawan-Bhana.

So where does this leave South Africa? The country is expected to grow at a tepid 3.2% over the next five years as Nigeria grows at around 6%.

"I think it is something that South Africa should be desperately aware of. We are in a phase where we need to consolidate our gains, look at how we can spur different industries, how we can generate growth on a more sustainable basis," said Ramkhelawan-Bhana.

South Africa's economy still makes up 17% of the continent's purchasing power. However, the consumer-driven economy has suffered because of slowdowns in mining and manufacturing, labor unrest and decreased productivity.

Nevertheless, South Africa does have several large advantages over other African economies - a very strong and complex banking system and strong infrastructure, which is something Nigeria lacks.

Paul Alagidede, a professor at the University of Witwatersand's Business School, in Johannesburg, says Nigeria's growth and economic prosperity in other African nations aren't necessarily bad for South Africa.

"In terms of regional clout here, on the continent, South Africa is very well positioned to take advantage of the growth potential of other countries within the continent… Talk about Shop Rite in Ghana, in Nigeria, talk about MTN, we have Standard Bank spreading all over, so these are companies that are doing a lot of work in other countries… So the growth in other parts of Africa should be good news for South Africa, even if we are not seeing the fiscal evidence of that in South Africa itself."

That kind of continental investment is expected to increase in the future. Just last week, Famous Brands, a South African franchise group, bought a 49% stake in the Nigerian chain Mr. Bigg's.

You May Like

Egypt's Suez Canal Dreams Tempered by Continued Unrest

Seen as a potential driver of recovery, Cairo’s plan to expand waterway had been raising hopes to give country much needed economic boost More

Ebola Maternity Ward in Sierra Leone First of its Kind

Country already had one of world's highest maternal mortality rates before Ebola arrived, virus has added even more complications to health care More

Malaysia Flight 370 Disappearance Ruled Accident

Aircraft disappeared on March 8, 2014; with ruling, families of 239 passengers and crew can now seek compensation from airline More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Groundbreaking Hand-Painted Documentary About Van Gogh in Productioni
X
George Putic
January 29, 2015 9:43 PM
The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Groundbreaking Hand-Painted Documentary About Van Gogh in Production

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Super Bowl Ads Compete for Eyes on TV, Web

Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Freedom on Decline Worldwide, Report Says

The state of global freedom declined for the ninth consecutive year in 2014, according to global watchdog Freedom House's annual report released Wednesday. VOA's William Gallo has more.
Video

Video MRI Seems to Help Diagnose Prostate Cancer, Preliminary Study Shows

Just as with mammography used to detect breast cancer, there's a lot of controversy about tests used to diagnose prostate cancer. Fortunately, a new study shows doctors may now have a more reliable way to diagnose prostate cancer for high risk patients. More from VOA's Carol Pearson.
Video

Video Smartphones About to Make Leap, Carry Basic Senses

Long-distance communication contains mostly sounds and pictures - for now. But scientists in Britain say they are close to creating additions for our smartphones that will make it possible to send taste, smell and even a basic touch. VOA’s George Putic reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Crowded Republican Presidential Field Off to Early Start for 2016

It seems early, but the 2016 U.S. presidential election campaign is already heating up. Though no one has officially announced a candidacy, several potential Republican contenders have been busy speaking to conservative groups about making a White House run next year. Many of the possible contenders are critical of the Obama administration’s foreign policy record. VOA national correspondent Jim Malone reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8837
JPY
USD
117.92
GBP
USD
0.6608
CAD
USD
1.2531
INR
USD
61.900

Rates may not be current.