Economic Confidential, August 2007

MULTILATERAL

Nigeria, three others overtake leading global developing markets

Africa’s top four economies comprising South Africa, Algeria, Nigeria and Egypt have overtaken the top four developing markets of the world – Brazil, Russia, India and China -- in terms of per capita income as well as foreign direct investment.

On the shoulders of these four leading African economies, also, rests the continent’s hope of economic development through the knock-on mechanism.

A study, undertaken jointly by the World Economic Forum, World Bank and the African Development Bank (AfDB), called Africa Competitive Report, identified these four nations as the continent’s growth nodes and discredited the traditional approach that saw the entire continent as a basket case.

In this report launched in South Africa at the continuing World Economic Forum on Africa, a team comprising Temitope Oshikoya, director, Development Research Department of the AfDB, and others showed that these four nations had overtaken the leading four global developing markets in significant economic indices. The nations are well positioned to drive the continent’s economic revival.

The per capita income of the African economies in 2005 stood at $1,841 (N235, 648), which was higher than that of the leading global four developing (BRIC) markets that stood at $1,669 (N213, 632). The report also notes that, while the population of the African countries amounted to just 26 percent of India’s population, their collective nominal Gross Domestic Product (GDP) amounts to 70 percent of India’s. With China, the four African nations constitute 22 percent of its population, and 24 per cent of its nominal GDP.

In terms of foreign direct investment (FDI) inflow, Africa’s top four recorded $16.2-billion(N2.I-trillion), which was 2.5 times higher than the FDI inflow to India for the year, and higher than the flow to Brazil and Russia for the year, too.

According to statistics from United Nations Conference on Trade and Development (UNCTAD) as well as the International Monetary Fund (IMF), South Africa, with a population of 48-million people, is by far the continent’s economic bulwark with a 2005 GDP of $240-billion (N30.7-trillion). Next is Algeria with a population of 33-million, and a GDP of $102-billion (N13.1-trillion).

Nigeria comes third with a population estimated then at 134-million and a GDP of $99-billion (N12.6-trillion). Completing the top four is Egypt with a population of 75-million and a nominal GDP of $93-billion (N11.9-trillion). Together, these four nations account for more than half of Africa’s GDP.

Highlighting the strategic positions of these four nations in the economic fortunes of Africa, the researchers noted that the nations constituted a third of the population of the continent, comprising 53 nations, and a fifth of its land mass. They have relatively large markets, and the developments in these four nations, therefore, rub off directly on a third of the population of the continent.

These four nations, the researchers say, have everything needed to become the growth poles of the continent. Geographically, they are spread out to cover almost all the cardinal points in the continent. Nigeria is positioned as the engine room for West Africa; South Africa for the southern Africa; Egypt and Algeria for North Africa. Though none of them is from East Africa, that flank could be covered by Egypt’s location in the North-east and South Africa’s spread over the entire southern tip.