Economy
From The Report: Nigeria 2015
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As the world’s seventh-most-populous country and its 26th-largest economy, Nigeria boasts a medium-sized middle class in absolute, if not relative, terms, and benefits from having had its first peaceful handover of power since 1999 following the presidential electoral victory in March 2015 of Muhammadu Buhari over incumbent Goodluck Jonathan. Although it is on track to become one of the world’s 20 largest economies by 2020, with average annual growth of 7% in the past decade, Nigeria requires significant private and foreign investment to attain its economic and human development goals. As part of the Jonathan administration’s Transformation Agenda efforts have been made to ease bottlenecks to growth, ranging from power generation and distribution to the agricultural value chain, premised on total infrastructure spending of $2.9trn over the next 30 years. While the economic policy of the incoming Buhari administration had yet to be clarified at the time of printing, investors expect the structural changes that have already been launched – ranging from power-sector restructuring to streamlining rules for doing business – to be seen through.

This chapter contains interviews with Ngozi Okonjo-Iweala, Coordinating Minister of the Economy and Minister of Finance; Aliko Dangote, President and Chief Executive, Dangote Industries; Tony Elumelu, Chairman, Heirs Holdings; Foluso Phillips, Chairman, Nigerian Economic Summit Group (NESG); Saratu Umar, Executive Secretary, Nigerian Investment Promotion Commission (NIPC); and Yemi Kale, Statistician General, National Bureau of Statistics (NBS).

Articles from this Chapter

Overview

GDP rebasing in Nigeria improves rankings but inequality still an issue
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Fresh from a rebasing exercise in April 2014 that boosted 2013 GDP by 89% to $509.97bn, Nigeria now ranks not only as Africa’s most populous country, but also its largest economy. It has long played an outsized regional role, making up 76% of West Africa’s GDP and around 60% of its population. Despite concerns linked to short-term and cyclical risks, including unequal development, policy uncertainty, declining oil prices and localised unrest, the longer-term growth fundamentals are clear. As…

Interview

Ngozi Okonjo-Iweala, Coordinating Minister of the Economy and Minister of Finance: Interview
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Interview: Ngozi Okonjo-Iweala How can Nigeria maintain current levels of GDP growth, and what are the risks? NGOZI OKONJO-IWEALA: To maintain our current levels of GDP growth, we must overhaul infrastructure, starting with power. Nigeria’s economy has been growing at an average rate of around 7% annually over the last decade with limited power supply. If we can double existing capacity in terms of hours of availability or megawatts, we expect to sustain economic growth of 8% or more. The unprecedented…

Interview

Aliko Dangote, President and Chief Executive, Dangote Industries: Interview
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Interview: Aliko Dangote What impact do you expect power privatisation to have on the broader gas-to-power value chain? ALIKO DANGOTE: The power sector is by far the largest consumer of natural gas in Nigeria and is expected to account for the bulk of domestic gas use in the future. Currently, gas use by power plants accounts for 70% of marketed gas production. Total gas production for use by power plants is just sufficient to fuel the available gas-fired generating capacity of 3382 MW. On the…

Analysis

Nigeria reworks its debt profile in the years since 2006 relief
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Eight years after securing $18bn in debt relief from the Paris Club and multilateral creditors, Nigeria has firmly repositioned itself on international debt markets. Having staged its second eurobond auction in as many years in 2013, with plans to return regularly to the dollar-denominated offshore bond markets, Nigeria is rebalancing its debt profile by paying down part of its local-currency exposure. While the rebasing of its GDP gives the country more room for additional issuances, it will need…

Interview

Tony Elumelu, Chairman, Heirs Holdings: Interview
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Interview: Tony Elumelu What more do you think can be done to encourage entrepreneurship in Nigeria? TONY ELUMELU: Entrepreneurship is key for me, but, more importantly, it is key for this continent and Nigeria in particular. We have a large number of unemployed young people and are still too reliant on foreign aid and assistance as a driver of economic activity. I do not think that model has worked well and do not think it is sustainable. I believe Africans, through entrepreneurship, can transform…

Analysis

Questions raised by Nigeria’s recalibrated GDP figures
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The product of two years of work, recalibrated figures for Nigeria’s GDP, which shifted the base year from 1990 to 2010, were published in April 2014. As a result, the economy leapfrogged 10 places in global rankings, with 89% growth in GDP in one stroke. As in any rebasing exercise though, the new figures are a double-edged sword. The updated national accounts reveal previously underestimated dynamic sectors and further raise Nigeria’s profile amongst foreign investors. Yet, they also compound…

Interview

Saratu Umar, Executive Secretary, Nigerian Investment Promotion Commission (NIPC): Interview
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Interview: Saratu Umar In what ways have inflows of foreign direct investment (FDI) changed over the past five years? SARATU UMAR: Nigeria has become a major investment destination on the African continent, averaging an annual inflow of about $7bn in the last six years. Although this may be far from the annual inflow target volume of $13bn per year, it indicates that our economy remains a competitive global investment destination in spite of various challenges. This was supported by Street Journal’s…

Analysis

Nigeria tries to transform its challenging demographics from a liability into an asset
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A central conundrum of Nigeria’s past decade of 7% average annual GDP growth has been the consistent rise in unemployment, poverty and inequality of distribution of wealth. Although the conclusions of the rebasing exercise, unveiled in April 2014, lifted per-capita income from $1555 to $2689, this new accounting will no doubt sound hollow to the more than 60% of Nigerians living in absolute poverty. The world’s seventh-largest population is expected to rise from its current 170m to 213m by 2020…

Interview

Yemi Kale, Statistician General, National Bureau of Statistics (NBS): Interview
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Interview: Yemi Kale Where did the most extensive changes in GDP contributors occur following the rebasing exercise? YEMI KALE: As a result of the rebased GDP there were major changes in terms of GDP contributors across the board. For example, the share of the agricultural sector declined from 34.7% to 21%, while the share of the services sector almost doubled from 29% to 53%. Just as important, the share of industry declined from 36.3% to 26%. In essence, there was a significant shift in the entire…