The World Bank Monday described Nigeria’s emergence as Africa’s biggest economy as good news for the continent, since it indicates that Africa may not be as poor as originally thought.
However, the Bank said its independent experts could still verify Nigeria’s latest figures.
According to the head of Nigeria’s National Bureau of Statistics (NBS), Dr. Yemi Kale, Nigeria has overtaken South Africa as the biggest economy in Africa.
He said in the Nigerian capital, Abuja, Sunday that following a rebasing exercise, Africa’s most populous nation’s GDP is US$488 billion, compared with South Africa’s GDP of US$384.3 billion.
“It may mean Africa is already less poorer than we think. This would be good news,” World Bank’s Chief Economist for Africa Francisco Ferreira told a news conference, held across the Bank’s Africa offices Monday through a video link.
Also speaking on the development, Punam Chuhan-Pole, World Bank Africa’s Lead Economist, said the Bank had an independent statistical unit that could verify Nigeria’s latest statistics, but insisted the new figures were unlikely to make Nigeria a more preferable investment destination compared to rival countries like South Africa.
“We now have a sense of how large the Nigerian economy is but what matters is the productivity. I do not think that investors would choose Nigeria over South Africa based on the GDP size alone,” said Chuhan-Pole, the lead author of a new World Bank report on Africa’s economic pulse.
Meanwhile, Africa’s economic growth is expected to hit 5.2% in 2014, buoyed by rising investments in the oil, gas and mining sectors, mostly in the countries emerging from conflict.
Sierra Leone, the Democratic Republic of Congo (DRC), Cote d’Ivoire and Mali emerged as the key drivers of Africa’s growth in 2013, driven by massive natural wealth investments.
In South Africa, the Bank economists said investments in the country’s mining sector and the government needed to focus attention on reducing the income inequalities.
Bank economists say for the high economic growth sectors to benefit more people, governments must directly re-invest the funds generated from mineral exports into social sectors.
Bank officials pointed out the need to re-invest these incomes on improving school enrolment rates and cash transfers for poor parents, as is done in countries such as Ethiopia.
They also urge the use of taxes, royalties and other incomes to be spent on creating social pensions for the elderly and the poor, while still ensuring the vulnerable populations on these cash transfers continue to work normally.