Nigeria becomes Africa’s Biggest Economy

Nigeria’s recalculated economy is worth $510 billion, by far the biggest in Africa, officials announced Sunday using long overdue revised data that gives the West African nation continental bragging rights but does little for the 70% of its citizens living in poverty.

The new value of Nigeria’s GDP adds previously uncounted industries like telecommunications, information technology, music, airlines, burgeoning online retail outlets and Nollywood film production that didn’t exist when the last GDP count was made in 1990. Then, there were 300,000 landlines. Today, Nigeria has 100 million cell phone users.

The new figures also will take account of growth in agriculture and tourism that have flourished since democracy was restored in 1999, ending decades of military dictatorship.

With one fell swoop, Nigeria knocked out of the ring South Africa, whose GDP of $353 billion was previously counted the biggest on the continent and which is the only African member of the G20.

“Nigeria’s success is a reminder that Africa is moving ahead despite its current challenges,” said investment manager Kevin Daly of UK-based Aberdeen Asset Management, which invests in Africa. He pointed out that it is a Nigerian, billionaire Aliko Dangote, who is building Africa’s largest privately owned oil refinery.

Investors’ attention will be drawn by the fact that while oil remains the biggest source of government revenue, about 80%, oil production is declining while Nigeria’s agriculture, communications and service sectors are enjoying healthy growth.

Nigeria has been Africa’s biggest drawer of direct foreign investment despite myriad woes, from massive corruption and oil thefts costing the country some $20 million a day to an Islamic uprising in the northeast that has killed more than 1,200 people so far this year, to a paralytic electricity supply that keeps businesses dependent on diesel-run generators.

Finance Minister Ngozi Ikonjo-Iweala told a news conference Sunday that the new data makes Nigeria the 26th largest economy in the world and raises its per capita income to $2,688, making it No. 121 in the world, up from No. 135.

That is still feeble compared to South Africa’s $7,336 for its population of 48 million. South Africa, bedeviled by mining strikes, violent protests over services and a lackluster performance that has kept annual growth at around 3.5%, still has infrastructure unrivaled on the continent, most notably a power sector that generates 10 times more electricity than Nigeria.

Nigeria’s revised figures will lower its much-vaunted growth rate of 7% but also will decrease an already low debt to GDP ratio of 21%, which should lower interest rates should the government want to borrow more, economists said.

Ikonjo-Iweala blamed decades of military rule for the delay in repositioning Nigeria’s economy, but the country is not alone. Ghana’s economy jumped by 60% when it recalculated its goods and services production in 2012, and Kenya and Zambia are considering the same.

Ikonjo-Iweala has said that Nigeria’s economy needs to grow at about 10% to address massive poverty and youth unemployment. Government statistics say unemployment increased from 12.7% in 2007 to 23.9% in 2011; the World Bank says unemployment among young Nigerians stands at 38%, but analysts say it is as high as 80% in many parts of the country.

Financial analyst Bismarck Rewane called the revisions “a vanity. The Nigerian population is not better off tomorrow because of that announcement. It doesn’t put more money in the bank, more food in their stomach. It changes nothing.”

Nigerians took to social networks to share their feelings. “So Nigeria has now supplanted South Africa as Africa’s largest economy. But I’ve not had light (electricity) for seven days, so it means nothing to me,” said one tweet.


Mozambique’s new coal mining industry

The remote town of Tete, situated in the centre-west part of Mozambique, is the heart of the country’s new coal mining industry. The area around the town has some of the world’s richest coal reserves.

Rajat Kohli, Standard Bank’s global head of mining and metals, called it the world’s last substantial untapped coal reserve. “About 100 million tons per annum of coal could be produced within the next five years, and that figure could even go further,” he said at a conference last year.

Mining companies operating in Tete Province’s Moatize basin include Rio Tinto as well as Brazil’s Vale.

The coal mines are linked via rail to the port of Beira. Brazilian mining giant Vale has also announced plans to build a railway line from its Moatize mine to the north-western port of Nacala to export coal.

Tete is booming due to mining activity in the area. However, according to Abrahamse, the town has very few formal supermarkets and hotels, creating significant opportunities for more developments. Carlson Rezidor has announced that it will soon launch its new Park Inn by Radisson hotel in Tete.

Pemba is a port city in northern Mozambique. It is traditionally known as a tourist destination, but these days Pemba is an important centre for northern Mozambique’s offshore natural gas fields in the Rovuma basin.

US-based Anadarko Petroleum and Italian oil & gas company Eni, have both recently announced significant gas discoveries in their respective blocks. These discoveries are important because of the size of the reserves as well as Mozambique’s relative proximity to markets in Asia. “This is rather close to the largest potential market for liquefied natural gas (LNG), which is Asia. It is easier to export from offshore Mozambique to Asia than it is from many other places,” Adi Karev, global oil & gas leader at Deloitte Touche Tohmatsu, told How we made it in Africa in an interview earlier this year.

Abrahamse says that Pemba, as is the case with the other towns mentioned in this article, has a lack of accommodation and retail facilities. “An example of the problem with Pemba is there is one five-star lodge that is booked out by the oil companies. The interesting story there is that post the 2008/2009 financial crisis the resorts were struggling, but since they found gas there, these hotels and lodges have been booked out by people working on the gas fields.”


Mozambique accelerated customs clearance

The Mozambican Tax Authority reports that sophisticated new scanners have been installed at border posts and airports to combat smuggling and crime.

The international airports at Maputo, Beira, Tete and Vilanculos, as well as the Maputo corridor road in the Ressano Garcia area now have inspection systems to improve customs security. The systems will be rolled out soon at more airports and a number of ports and border crossings.

The president of Mozambique Tax Authority, Rosario Fernandes, said in officially launching the system at Chingodzi Airport in Tete that the devices would help control entry and exit of goods in line with best practices worldwide.


Centenary City Nigeria’s “Smart City”

Out of Nigeria’s glorious Centenary celebrations, a major legacy will be created – the development of Centenary City. ?Built from scratch along Airport Road in Abuja, Centenary City will be the second-largest private city development in history, and signals a new national economic awakening.

Centenary City will promote world-class multinational and domestic businesses in a planned environment that will encourage business and trade in the 21st century. Around 100,000 people will live in the new city, with a further 500,000 expected to pass through it daily.

In a concerted effort to boost trade and investment in Nigeria, and following the success of Dubai, Monaco, Shenzhen, Singapore and Songdo, Centenary City will incorporate a free trade zone, duty free regime, tax holidays and non-regulated banking services.

According to Nigeria’s Minister of Information Labaran Maku, at least 16 private sector companies will invest around $4 billion in the development of 10 districts in the city. The Federal Government will provide the land in the FCT and agree the design, but will have no further input.

The concept of Centenary City is exciting and far-reaching. The aim is to synchronise the demands of today’s society with the expectations of tomorrow, and allow the city to develop in a sustainable, ecologically and socially responsible manner.

As well as signposting the Nigeria of the future, Centenary City is designed to be a centre for the preservation of Nigeria’s political history, and the documentation of the country’s contributions to the political, cultural and economic development of Africa.

Centenary City will be beautiful, merging the natural landscape with great architecture, and creating an environment that is alive and productive. It will be a green city with a natural buffer that envelops the entire conurbation, and will include a central park to provide a green spirit to give clarity and iconic power to the city centre.

While flexible topographies will create a flowing and vibrant city, Centenary City will be formed around an urban grid that is modular and organic, with an efficient traffic system where people and transport can co-exist successfully. Public areas will feature a prominent cultural core, with symbols of Nigeria’s unity and strength, and the commercial centre will boast the latest in office architecture, exotic hotels, shopping malls, convention centres, theatres and cinemas.

Elegant high-rise apartment blocks will mix with family houses, served by schools and a university campus, health centres and theme parks. Sport will also be given great prominence (there is already an offer of sponsorship for an Institute of Sport that will include a mini stadium and signature golf course). A modern sports hospital will provide cutting-edge sports medicine and diagnostic tools, and plans are being made for it to perform double bundle arthroscopic posterior cruciate ligament reconstruction (knee surgery), with a view to attracting medical tourism to the city.

The city will benefit from a constant power supply, with a gas-fired 500 MW power plant connected directly to a gas terminal. Water management will ensure that 60% of water will be recycled, and waste will be reduced as close to zero as possible. Domestic waste will be used to create nutrient-rich soil fertiliser, or incinerated as an additional power source.

As a preferred destination for multinational and domestic businesses, it is expected that the top corporate bodies in Nigeria will have a major presence in the city.

Federal and Presidential presence

Centenary City isn’t the only major construction planned to celebrate Nigeria’s centenary. Visitors to Abuja will be welcomed by a new Abuja City Gate (expected to become a major tourist attraction in its own right), a new ceremonial arcade will be built in Eagle Square for government ceremonies and activities, and a presidential retreat is planned as an alternative operational base for the president.

The Presidential Archives will house the history of Nigeria’s political development and the contributions of the country’s presidents, while the Institute of Federalism in the University Campus will become a world-class institution for the preservation of Nigeria’s political history.

With its outstanding infrastructure and secured business environment it is expected that Centenary City will become a popular business and tourist destination by the end of its planned five-year development cycle.

The city will demonstrate the harmony between nature and the work of man, and set an ideal example for the future of urban development in Nigeria – reinforcing the nation’s collective destiny for the next 100 years.


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