Latest figures from the National Bureau of Statistics put Nigeria’s total real GDP at the end of 2014 at about N67.9trillion or $339.8billion using an exchange rate of N200. This figure suggests if the naira continues to depreciate Nigeria will lose its enviable position as the giant of Africa. Nigeria’s nominal GDP based on the report came to about N90.1trillion or $450b. Just under a year ago when Nigeria rebased its GDP numbers our economy shot up to a nominal value of N80tr or $509.9billion rivaling South Africa at about $350b. 9 Months down the line the economy is in a tail spin as oil prices tank and our exchange rate continues to depreciate by about 29% since last year (N155 to N200).
This new exchange rate is currently more of a threat for Nigeria as every Naira earned in 2014 is now worth nearly 30% less currently. Whilst South Africa has also been affected by the current economic crisis facing most emerging countries, ours has been worse. They also grew at a slower rate to Nigeria. The World Bank estimates South Africa’s GDP at $350b and currently suggest Nigeria is still bigger economy on nominal terms. But with exchange rate getting out of hand, we may just lose that status by fiat and without any major effort by South Africa who has seen exchange rate drop by about 10% and GDP growth rate rose by just 1.4% in Q4 2014.
The fear however, is if Nigeria devalues again and if that by some stroke of bad luck it sends the exchange rate plummeting to about N250 to a dollar. If that happens our GDP will be about $360b and dangerously close to losing our pride as “no 1 economy in Africa.
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