Johannesburg - The recent rebasing of Nigerian gross domestic product (GDP) has, as widely expected, resulted in Nigeria emerging as the biggest economy in Africa. This is good news not just for Nigeria, but for Africa at large, as it is further evidence that the “Africa rising” narrative is real and not just hot air.
This, I want to argue, matters more than the narrow focus on Nigeria overtaking South Africa which, in my view, is more in form than in substance. Substance should prevail over form when we debate this matter.
For Nigeria, this could not have come at a better time. Why?
First, next month, Nigeria is set to host the World Economic Forum Africa Summit for the first time. Global investors will converge to explore and discuss investment opportunities in that country and the rest of sub-Saharan Africa.
Nigeria will certainly use that to celebrate and showcase its new status as the biggest economy on the continent. There will be intense attempts to try to claim that Nigeria is or should be the new gateway to Africa – a position indisputably held by South Africa over the past two decades.
Second, Nigeria has always viewed itself as the old kid on the block and harbours resentment in being outflanked by South Africa – the new kid on the block. With elections due next year, this is a good news story for President Goodluck Jonathan.
South Africa’s key role in strategic global platforms like the Group of 20 and the Brics nations (Brazil, Russia, India, China and South Africa) makes Nigeria uncomfortable. Some people have even started saying that South Africa needs to give way to Nigeria on such key global platforms as Brics. They’re wrong. It won’t happen. It shouldn’t.
The rebasing of Nigeria’s GDP has unleashed an avalanche of simplistic, misguided and, in some instances, self-serving conclusions about the decline of South Africa’s economic and, by implication, political hegemony in Africa. Nothing could be further from the truth.
Some commentators are using this recent development to either take a swipe at South Africa or fuel destructive competition between the the two countries. That’s as unhelpful as it is mischievous. It should not be allowed.
Africa has a long and sad history of divide and rule which set countries or tribes apart because of petty differences. Pretoria and Abuja must avoid that. They are better off united than divided.
Africans must adopt a broader global strategic perspective and concept where it is not just being the best and/or biggest in Africa only that counts, but being the best and/or bigger on the global stage.
Africa is punching below its weight. That’s sad. It’s a missed opportunity, especially given the degree of endowment with natural resources, fertile land and a youthful and energetic population.
What we need are visionary and competent leaders who plan and act for the long term instead of looking at short-term populist programmes aimed at perpetuating their terms in office.
South Africa’s economic, political, social and institutional sophistication is light years ahead of Nigeria’s. It will take time for Nigeria to catch up. For many years to come Nigeria will still have to follow where South Africa leads.
However, there are many opportunities for South Africa also to learn from Nigeria. So it should be.
These are crucial factors that matter more than just one single number or factor which is, at best, of limited statistical interest, as it does not even cover GDP per person comparisons between the two countries.
In 2011, something similar happened when China overtook Japan and became the second-largest economy in the world.
Has that impacted Japan in any negative way? No. Has it changed foreign investors’ attitudes towards Japan? No. Is China now perceived to be better than Japan? No.
Japan is still a First World economy while China remains an emerging market economy.
South Africa will remain the best economy in Africa while Nigeria will still be facing the challenge of catching up where South Africa leads.
The outcome of the rebasing would have been surprising to me if it produced a contrary result.
Being the biggest economy is not necessarily the same as being the best. What matters most, in the ultimate analysis, is being the best.
That takes time. Nigeria has a long way to go.
Nigeria and South Africa would serve their respective national economic interests best by co-operating and collaborating more with each other than competing and quibbling with each other for being either “bigger or better than thou”. Africa needs a strong, efficient and united South Africa and Nigeria.
What are the implications of Nigeria being the biggest economy in Africa? First, Nigeria’s rise is good for South Africa and Africa at large.
The rise of any African country is good for the continent as a whole, as much as the rise of any Latin American, European or Asian country is good for those continents.
South African companies are actively penetrating the rest of the continent and this gives further impetus to Africa as a continent of massive and growing opportunity rather than one of poverty, disease, war and corruption.
Second, Nigeria’s rise presents that country with the responsibility to act prudently in managing its domestic socio-economic and political affairs. Being big alone won’t be enough.
Now is the time for Nigerian leaders to eradicate corruption, promote law and order and create conducive conditions for foreign investors to come in and invest. Failure to do that will be a missed opportunity.
Third, foreign investor interest in Nigeria and Africa will increase as a result of this.
Africa is viewed as the new, yet-to-be-tapped frontier by global investors. This is good for South Africa and the continent at large.
South Africa needs a strong and prosperous Nigeria with which to trade, invest and share the burden of carrying the rest of Africa to prosperity. This is in South Africa’s enlightened self-interest.
Last, as in the case of Japan and China, this is largely more a matter of form than substance.
South Africa’s position as one of the top emerging markets in the world (not just in Africa) is unassailable.