A South African Based online publication, IOL, has stated that If Nigeria and South Africa keep growing at their current paces, Nigeria could replace South Africa in the Group of 20 (G20) countries within nine years.
According to IOL, this statement was credited to Stanlib chief economist Kevin Lings. In a recent note he says: “It is entirely feasible that, by then, Nigeria’s economy will have overtaken South Africa’s, making it eligible for G20 membership, possibly at the expense of South Africa.”
The G20 is a group of 19 advanced and developing countries plus the EU, set up in 1999. South Africa is the only African country to be represented.
Lings points out that 20 years ago, the domestic economy was 7.5 times the size of the Nigerian economy, in dollar terms. But by the end of 2012 it was only 1.4 times the size of Nigeria’s.
“This narrowing of the gap is mainly because Nigeria’s economic growth rate has accelerated meaningfully in recent years, though off an extremely low base, while South Africa’s growth rate has moderated.”
According to Nigeria’s central bank, growth in gross domestic product (GDP) averaged 6.8 percent between 2005 and 2013. From 2005 until the global recession of 2008/09, South Africa’s growth rate averaged a little over 5 percent. Since then it has not topped 3.5 percent.
Nigeria’s central bank said the fastest growing segments were wholesale and retail trade, and telecommunications. Nigeria’s 170 million people make it the most populous country in Africa and the seventh-biggest in the world.
This creates a massive market, attracting investment from across its borders, including from South Africa, which is becoming increasingly aware of the opportunities in servicing this population.
In contrast, South Africa’s population is estimated at 51.1 million (5.7 percent of the population in sub-Saharan Africa), making it the fifth most populated country in Africa, Lings says.