The ever-expanding moonscape that stretches out behind a wall holding back the Atlantic Ocean from Lagos will one day host a project designed to help anchor Nigeria as Africa’s biggest economy.
But if the ambitious plan to construct a new city on land reclaimed from the sea represents Nigeria’s future, it is one that will be outsourced. Almost every aspect of it will be privately run, from electricity supply to security.
Economists expect Nigeria, already the continent’s most populous nation and largest oil producer, to overtake South Africa in terms of gross domestic product (GDP) over the next several years, technically making it Africa’s biggest economy.
But the impressive-sounding title tells an incomplete story, and the Eko Atlantic new city project illustrates the contradictions in a country crippled by corruption and unable to provide basic services, but with vast potential that could indeed one day be realised.
“The more important thing is, fundamentally, you have a population of 165 million”, while South Africa’s was around 52 million, Bismarck Rewane, a respected economist and the head of Lagos-based Financial Derivatives, said.
“So even if you are the same GDP, your GDP has to be four times more – 400 percent more than that of South Africa for you to have [roughly] the same income per capita.”
A recalculation of Nigerian GDP is the main reason it is projected to overtake South Africa. Nigeria’s economic output data is currently calculated using 1990 as the base year.
In order to come up with more accurate data, the new figures will use 2008, greatly boosting overall Nigerian GDP, which the World Bank put at $244 billion (R2 trillion) for 2011 compared with South Africa’s $408bn.
The rebasing is expected to be complete in October, and economists are predicting a GDP boost of about 40 percent, which would put Nigeria within striking distance of South Africa’s output.
Nigeria’s economy has been growing faster than South Africa’s – at an estimated rate of 6.6 percent for 2012 compared with 2.5 percent.
The Nigerian economy has been supported in particular by high oil prices and the rapid growth of the cellphone industry. Agriculture accounts for some 40 percent of GDP and the country is trying to boost production in that sector.
Estimates for when Nigeria will at least equal South Africa have ranged from as early as 2014 to around five years from now. Progress has been made in areas including bank reform, and the government has been trying to create a sovereign wealth fund to better invest oil revenues.