Nigeria's recent rebasing of its GDP continues to lead to statistical adjustments. These include last week’s downwards revision of Nigeria’s 2013 GDP growth rate from 7% to 5.5%. The 2012 GDP growth has also been reduced to below 5% by the National Bureau of Statistics (NBS), although 2014 growth is still expected to exceed 6%.
While Nigeria is still operating from a massively increased GDP "base" level, such a change does raise concerns about future official growth rates and whether growth - quite aside from broader questions of "job creation" and increase in living standards - is being adequately assessed.
Nevertheless, the NBS projects that GDP growth in 2014 will be approximately 6.2%, based on a first quarter GDP growth rate of around this level. NBS director general Yemi Kale claims that Q1 growth is typically slower than growth for subsequent quarters.
Although growth in the oil and gas sector has been modest, optimism about growth in other sectors of the economy abounds. For example, the Renaissance Capital emerging markets bank has recently released a report entitled "Nigeria's GDP: Bigger but slower - Manufacturing is the engine of growth". It suggests that percentage manufacturing growth has been in double digits, with the Dangote-dominated and Lafarge target cement sector being a notable success story. Rencap also cites textiles as a major growth area, a significant development given the decimation of textile producers in West Africa, including in Ghana, because of foreign competition.
The attraction of the diversified Nigeria growth story is also illustrated by analyst observations that at least US$500 million of investment is planned to build a series of major shopping centres by or before 2016. South African banks, retail players, plus the UK’s CDC private equity spin-off Actis, are among the participants in a country with a significant "demographic dividend". South Africa's Shoprite Holdings, which operates a number of shopping centres or malls throughout Africa - including in Lagos' Ikeja district, Abuja and Accra - has just announced a 10.5% increase in its profits through to June 2014, and so interest is likely to continue.
For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.
© 2014 Menas Associates
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