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

US Imposes Sanctions on Alleged Honduran Drug Gang

Treasury department alleges Los Valles group is responsible for smuggling tens of thousands of kilograms of cocaine into US each month More

At 91, Marvel Creator Stan Lee Continues to Expand his Universe

Company's chief emeritus hopes to interest new generation of children in superheroes of all shapes and sizes by publishing content across multiple media platforms More

Photogallery New Drug Protects Against Virus in Ebola Family

Study by researchers at University of Texas Medical Branch, Tekmira Pharmaceuticals is first looking at drug's effectiveness after onset of symptoms More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
African Media Tries to Educate Public About Ebolai
X
George Putic
August 20, 2014 8:57 PM
While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video African Media Tries to Educate Public About Ebola

While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video Ferguson Calls For Justice as Anger, Violence Grips Community

Violence, anger and frustration continue to grip the small St. Louis suburb of Ferguson, Missouri. Protests broke out after a white police officer fatally shot an unarmed black teenager on August 9. The case has sparked outrage around the nation and prompted the White House to send U.S. Attorney Eric Holder to the small community of just over 20,000 people. VOA’s Mary Alice Salinas has more from Ferguson.
Video

Video Beheading Of US Journalist Breeds Outrage

U.S. and British authorities have launched an investigation into an Islamic State video showing the beheading of kidnapped American journalist James Foley by a militant with a British accent. The extremist group, which posted the video on the Internet Tuesday, said the murder was revenge for U.S. airstrikes on militant positions in Iraq - and has threatened to execute another American journalist it is holding. Henry Ridgwell has more from London.
Video

Video Family Robots - The Next Big Thing?

Robots that can help us with daily chores like cooking and cleaning are a long way off, but automatons that serve as family companions may be much closer. Researchers in the United States, France, Japan and other countries are racing to build robots that can entertain and perform some simpler tasks for us. VOA’s George Putic reports.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.

AppleAndroid

World Currencies

EUR
USD
0.7492
JPY
USD
102.27
GBP
USD
0.5960
CAD
USD
1.0950
INR
USD
61.300

Rates may not be current.