If reports from the African Development Bank are anything to go by, Nigeria might have lost her place as the biggest economy in Africa. According to the report, South Africa was ranked the largest in Industrial Gross Domestic Product with a 44.8 percent, closely followed by Egypt with 30.1 percent; Cote d’Ivoire, 29 percent; Kenya 23.3percent; Ghana 21percent while Nigeria is down the ladder with 13.1 percent.
The Pan-African development bank profiled top eight countries on the continent and the contribution of its Industrial Gross Domestic Product (GDP) to their economies. The industrial GDP which measures the value added or the contribution of the private sector or government sector to the overall GDP.
The value added is the difference between an industry’s gross output and cost of its intermediate inputs such as energy, raw materials, semi-finished goods and services that are purchased from all sources.
Why the drop in ranking?
According to 2017 Q3 figures released by the Nigerian Bureau of Statistics, the non-oil GDP figures contracted when compared to Q2 figures. The non-oil sector contracted by -0.76 in Q3 compared to the growth of 0.45% in the preceding quarter.
The manufacturing sector contracted by -2.85% in Q3 from 0.64% in Q2 2017. The Construction sector also contracted by 0.46% in Q3 from 0.13% in Q2 2017; Trade sector also contracted by -1.74% in Q3 from -1.62% in Q2 2017. Also, ICT also contracted by -4.48% in Q3 2017.
The non-oil sector has continued to experience stunted growth largely due to government policies, coupled with the slow Implementation of the 2017 budget which has further hampered the growth of critical sectors like the construction, manufacturing sectors of the economy. Despite the recovery from the recession which was largely driven by an increase in the volume of production and increase in global oil prices the non-oil sector remains in recession.
According to the President of Africa Development Bank, Dr. Akinwumi Adesina, “We need to produce more and we need to produce better. Most of all, we need to add value to our resources and raw materials and turn them into processed products.” He suggested.
If the country is to return as the biggest economy on the continent, the government must drive the process by coming up with policies that will revive the critical sectors. The manufacturing sector will continue to experience slow growth if the country continues to experience epileptic power supply.
The country needs to move from exporter of raw materials to exporter of finished products. Government is the biggest player in the construction sector hence government must inject funds into this sector through timely release of funds for the completion of capital projects and public infrastructure.