Nigeria Said to be One of World’s Top 20 Economies by 2030

  According to McKinsey & Co, a global management consulting firm, Nigeria has the potential to be one of the world’s top 20 economies by 2030 seeing as they have a consumer base that exceeds the current population of France and Germany, Nigeria, Africa’s biggest economy, may expand about 7.1 per cent a year through 2030, which would tentatively boost the country’s Gross Domestic Product (GDP) to $1.6 trillion, pushing it above Netherlands, Thailand and Malaysia, the New York-based company said in a report yesterday. The company stated that about 60 per cent of Nigeria’s estimated population of 273 million by then may live in households earning more than $7,500 a year, precipitating a consumer boom. “Nigeria has a very positive outlook,” co-author of the report, Acha Leke, said in an interview on Bloomberg TV Africa. “The most important thing that needs to be done to get it there is execution of government policies.” As Africa’s largest oil producer with a population of about 170 million, Nigeria has consistently posted annual growth rates in excess of four per cent over the past decade. This has drawn foreign investors such as Unilever Plc, Nestle and Shoprite Holdings Limited to expand operations despite an upsurge in violence by militants in the North. Based on McKinsey’s growth estimates for the economy, annual sales in consumer goods could more than triple to $1.4 trillion by 2030 from $388 billion currently, it said. The country’s retail and wholesale trade industry would probably become the largest contributor to Nigerian growth by then and 35 million households are expected to earn more than $7,500 a year, according to the report. While oil constitutes a major 70 per cent of government revenue and most of Nigeria’s export earnings, its share of the economy has waned. After the statistics office overhauled its GDP data in April, oil’s contribution to economic growth between 2010 and 2013 was 5.1 per cent, compared with 14 per cent for manufacturing and 20 percent for trade, according to McKinsey. The Nigerian Stock Exchange All-share Index has gained 2.9 per cent this year, adding to its 47 per cent surge in 2013. The naira has dropped 1.1 percent against the dollar since January. The report has advised that the government needs to address poverty, mitigate the cost of basic services, such as housing and energy, expand electricity supply and boost productivity in farming. “If execution doesn’t happen, there’s actually a big risk for the country, even from a security stability perspective, to create jobs and lift millions of people out of poverty. “That has to be a big focus, to grow in a way that is inclusive,” Leke said. The life expectancy in Nigeria is 54 years, which is eight years lower than in Ghana and twenty years below Brazil, according to McKinsey. The Managing Director of Lagos-based Centre for Public Policy Alternatives, Folarin Gbadebo-Smith, said: “It’s a totally disconnected discussion between what we can be and what we will be. The outcome depends on what our government does.”