Guest: Is Nigeria Africa’s Biggest Economy Now? Maybe!
Joshua Keating is a staff writer at Slate focusing on international affairs and writes the World blog.
Nigerians, yesterday, discovered the surprising news that the size of their economy had doubled overnight, making it the largest economy in Africa and the 26th largest in the world. It took the biggest in Africa crown away from South Africa, which still has a much larger GDP per capita.
Nigeria hadn’t calculated its GDP since 1990, and the new number takes into account a number of new industries for the country including telecommunications and the booming Nollywood film industry.
This isn’t the first time this has happened in Africa in recent years. After a similar recalculation in 2010, the size of Ghana’s economy “grew” by 60 percent, catapulting it into the World Bank’s middle-income bracket.
Given that these countries seem to have had entire sectors of the economy they were leaving off their books, it certainly raises some questions about other GDP figures we see reported on a regular basis.
The unreliability of African economic statistics was the topic of a book last year by Simon Fraser University economist Morten Jerven. Jerven argues that GDP “is the most widely used measure of economic activity, yet little is known about how this metric is produced and misused in debates about African economic development.”
On the other hand, as my old colleague Uri Friedman asks, “Are we too obsessed with GDP as a measure of countries' economic strength and health?”
As Chris Blattman put it last year, policymakers are hung up on the reliability of statistics because they “want the world nicely ordered with levers to pull and a dashboard to monitor.” Improving the numbers we have would be great, but most countries have more pressing concerns.
(See Dayo Olopade’s new book The Bright Continent for an welcome antidote to state- and statistic-oriented thinking about economic development in Africa.)
The fact that Nigeria’s economy is significantly bigger this week, and that oil is less of a factor in its growth is good PR for the Nigerian government. (Who doesn’t love Nollywood?) But it doesn’t really do much for you if you’re Nigerian. As one social media user quoted by the AP put it, “Nigeria is Africa’s biggest economy - on paper. So technically, I’m rich in theory.”
If Nigeria’s figures were off for so long, I’m guessing most citizens probably aren’t filled with confidence that they’re totally correct now. Today’s news probably tells us less about how we should view Nigeria than how we should view published GDP figures as a measure of anything close to reality.