Nigeria has become Africa’s biggest economy, overtaking South Africa’s position by a land slide.
This even though the World Bank listed Nigeria as one of six countries in Africa and one of 10 in the world with the highest number of extremely poor people, last week.
South Africa is not on that list which includes the DRC, Tanzania, Ethiopia and Kenya.
President of the World Bank Jim Yong Kim describes the term “extremely poor” as people living on less than $1.25 a day.
Reports of the released gross domestic product (GDP) figures show that the drastic growth and difference between the two economies is due to their (Nigeria) widely popular film, music industries as well as their telecommunications systems. The leading oil producer’s GDP stands at $503-billion whereas South Africa’s GDP is 350 billion dollars, according to Nigeria’s statistics bureau.
A true definition of growth
So what exactly is meant by growth particularly in the context of a country’s growth? What sectors are affected and in what manner are its people affected?
This new development in Nigeria’s growth does not necessarily mean that Nigeria is a better off country than South Africa. While Nigerians, particularly young people, have entrepreneurial minds and opportunities to start businesses as well as tap into the film and music industries.
Nigerian entrepreneur Jason Njoku is the founder of iROKOtv which is at the forefront of Nollywood. Nollywood makes up 1.2% of the country’s GDP.
Despite increasing growth there are still challenges to prosperity in Nigerian society.
Poverty is still rife, there are high levels of unemployment and inequality as well as the contentious issue of corruption within the Nigerian government.
South Africa’s still standing tall(ish)
Even though South Africa has lost the top spot, its position as a big and strong economy within the African continent has not been blurred. While there are substantial issues of unemployment, inequality, poverty and corruption – a matter which has seen the country’s president and other officials at the centre of it – South Africa has made significant strides to ensure a better quality of life for South Africans.
One cannot deny that the film industry in Nigeria is far more lucrative than that of South Africa, however the quality is debatable.
The National Film and Video Foundation, a section of the Department of Arts and Culture, reported in a study they conducted last year the South African film and television industry contributes about R3.5-billion a year to the country’s economy.
What is the situation on the ground?
The Nigerian statistics bureau said the increase in GDP does not mean that individuals were getting richer.
Poverty in South Africa has been reported to have decreased according to figures released by Stats SA. Nigeria’s higher GDP did bring into question what South Africa needs to be doing to grow at the same level as Nigeria, particularly because South Africa is the only representative of Africa in BRICS and the G20.
South Africa needs to look at creating opportunities for young people to start businesses and make a contribution to the economy. The unemployment rate in South Africa is still high, particularly amongst youth, and the government has struggled to create jobs.
Whether a country is rated the biggest economy on its continent or not, it is important to consider the rationale behind pursuing investment opportunities and consider the impact on the country as a whole.
Nigeria should be commended for the strides that have been made to strengthen the economy however this should not take away from the fact that a lot needs to be done to improve the lives of people both in Nigeria and in South Africa, in fact, in the world.