7 Apr 2014

Nigeria says it is top African economy

3:49 pm on 7 April 2014

Nigeria has declared itself the biggest economy in Africa, overtaking South Africa for the first time.

The announcement follows a restructuring in the way Nigeria measures its gross domestic product.

Shoppers at new South African retail giant Shoprite outlet in Kano, Nigeria.

Shoppers at new South African retail giant Shoprite outlet in Kano, Nigeria. Photo: AFP

Nigerian GDP now includes previously uncounted industries such as telecoms, information technology, music, online sales, airlines, and film production, the BBC reports.

GDP for 2013 totalled $80.3 trillion naira ($US509.9 billion), the Nigerian statistics office said.

That compares with South Africa's GDP of $US370.3bn at the end of 2013.

However, some economists point out that Nigeria's economic output is underperforming because at 170 million people, its population is three times larger than South Africa's.

On a per capita basis, South Africa's GDP numbers are three times larger than Nigeria's.

Rebasing is carried out so that a nation's GDP statistics give the most up-to-date picture of an economy as possible.

Most countries do it at least every three years or so, reports the BBC, but Nigeria had not updated the components in its GDP base year since 1990.

Then, the country had one telecoms operator with about 300,000 phone lines. Now it has a whole mobile phone industry with tens of millions of subscribers. Likewise, 24 years ago there was only one airline, and now there are many.

International aid donors are keen for more African countries to undertake this process regularly because it enables them to make better decisions when it comes to aid.