Nigeria has overtaken South Africa as the biggest economy in Africa, the local media reported Monday, quoting the head of the National Bureau of Statistics (NBS), Dr. Yemi Kale.
Nigeria, Africa’s most populous nation, also leapt to the 26th largest economy in the world, following the rebasing of the Gross Domestic Product (GDP), details of which were released by Kale in the nation’s capital, Abuja, on Sunday.
Following the rebasing exercise, estimates for 2013 hit US$509.9 billion from US$285. 56 billion, compared with South Africa’s GDP of US$384.3 billion.
The new nominal GDP also places Nigeria ahead of countries like Austria with US$394.7 billion, Venezuela with US$381.26 billion, Columbia (US$369.6 billion), Thailand (US$365.96 billion), Denmark (US$314.88 billion), Malaysia US$274.7 billion and Singapore US$269.87 billion.
Nigeria’s rebased figures put the value of the nominal GDP in 2012 at 71.1 trillion Naira (about US$453.9 billion) as well as a projected figure of about 80.2 trillion Naira (about US$509.9 billion) in 2013.
“The economy’s structure has changed significantly,” said Kale. “We are witnessing a historic rebasing of our GDP which was not done for more than two decades.
“The next rebasing will be in 2015 and the results will be out in 2016, we also intend to measure the economy every five years.
The revised figures indicated that the services sector, which comprises financial institutions, information and communications, real estate, professional, scientific and technical services, and trade, contribute about 52 per cent of total GDP, with industry coming a distant second at 25.7 per cent.
They are followed by agriculture (22 per cent), telecommunications (8.69 per cent), manufacturing (6.83 per cent), and entertainment, which had not been previously captured (1.42 per cent).
He said the previously excluded sectors including telecommunications and information services, publishing, motion picture, sound recording, and music production and broadcasting were accommodated in the latest results.
Other sectors, which had also been captured in the rebasing exercise were arts, entertainment and recreation, financial institutions and insurance, real estate, professional, scientific and technical services, administrative and support services, public administration, education, human health and social services, and other services. This brought the list of activities captured to 46 from 33.
According to Kale, real GDP growth in the aftermath of the rebasing exercise was estimated at 5.09 per cent in 2011; 6.66 per cent in 2012 and a projected 7.41 per cent in 2013.
“Over the period, the economy is expected to grow by an average of 6.39 per cent. The services sector is expected to grow the fastest during this period, increasing by an average of 7.72 per cent. This is followed by industry that is expected to by 7.19 per cent. Agricultural sector is expected to grow grow by an average of 2.61 per cent during the period.”
The World Bank Country Director for Nigeria, Marie Francoise Marie-Nelly, who witnessed the release of the figure, said efforts should be intensified to bring the informal sector into the formal economy because it constitutes a major factor to the development of any economy.
The presentation of the new figures was also attended by key officials from both the public and private sectors of the economy as well as representatives of the International Monetary Fund and the African Development Bank.
Rebasing of the national account series, which includes the GDP, is the process of replacing an old base year with a new and more recent one.
The base year provides the reference point to which future values of the GDP are compared and it is a normal statistical procedure undertaken by the national statistical offices of countries to ensure that national account statistics present the most accurate reflection of the economy.
The key benefits of the rebasing exercise are that its results enable policy makers and analysts to obtain a more accurate set of economic statistics that are truer reflection of current realities for evidence-based decision-making.
Rebasing also reveals a more accurate estimate of the size and structure of the economy by incorporating new activities, which were not previously captured in the computational framework.
This is the first time the Nigerian economy will be rebased in almost a quarter of a century.