GOOD NEWS FOR NIGERIA


We woke up this morning to good news for Nigeria. It turns out Nigeria has been using an outdated method of calculating its GDP. They have been using 1990 prices as a basis for price index. That posed serious problems because in 1990, several vital sectors of the current Nigerian economy did not exist like the vital music and film industry (Nollywood) which is the third largest in the world by some counts; the large scale telecom sector was still in infancy, and for the first time, the informal sector is going to be included in calculations.

That said and done, Nigeria is on track to become the largest economy in Africa. The implications of such a change could be; a larger growth rate figure, a larger economy, a smaller debt-GDP ratio, a better credit rating and hence a more conducive economic environment for attracting foreign investments.

This is the good part of the story. The other part, Nigeria is the one of the countries with the deepest divide between rich and poor in Africa. in fact you just need to take a tour on the Lagos waters. As you approach Victoria Island, you see the luxury boats of the rich and affluent, but on the other side of the same water, you see the dilapidated canoes of the poor fishermen who can barely afford the basics of life. Nigeria adds hundreds of new world class millionaires every year. Even the inhabitants of oil-producing areas do not see the proceeds of the oil.

If the federal government can stem this divide and corruption, Nigeria could be the next China.