Producing or Consuming?

Producing or Consuming?

It gives me much joy to venture into such a challenging topic as this, as I am very sure it is a right step to solving financial problems that is or has been facing individuals, businesses and government organizations. Therefore, to venture into such an article as this, is to profer a solution to combating our ‘roaring economic enemy’.

One of the measurements of the performance of every economy is its Gross Domestic Product (GDP) and the primary driving force of economic growth in any country is the growth of productivity, which is the ratio of economic output to inputs (capital, labor, energy, materials and services (KLEMS)).

Gross Domestic Product GDP is the broadest measure of a country’s economy, and it represents the total market value of all goods and services produced in a country during a given year.

In a sense, Nigeria’s current economic output is underperforming its potential output with its large population of 170 million, which is 3 times the size of South Africa’s at 52 million. With its huge population disparity Nigeria’s rebased GDP of $432 billion compares with South Africa’s GDP of $370.3 billion at year end 2013 is still not justifiable.

For Nigeria to economically compete with South Africa which holds the largest economy in Africa till 2012, its GDP should be standing at $1 trillion so as to able to have a positive impact on per capital income, among other indices.

Some report stated that Nigeria now has the largest economy in Africa for YE2013(though this is NOT the same as the best), while another report gave the following as the true figure for year end 2013:

Richest African Countries (by 2013 GDP)
1. South Africa: $595.7 billion (up 17.8%)
2. Egypt: $551.4 billion (up 25.1%)
3. Nigeria: $478.5 billion (up 50.6%).

Whilst it’s a good news to believe that Nigeria has finally overtaken South Africa to assume it’s rightful place as the largest economy in Africa, we should however pause for reflection upon the following facts:

1. South Africa still has the most diversified/sophisticated economy in Africa.
2. South Africa has the best infrastructure (roads, rail, airports, seaports, telcommunications, hospitals, higher institutions etc)in Africa.
3. South Africa’s power output (over 40,000MW) dwarfs that of Nigeria (about 4,000MW).
4. South Africa is the only country on the African continent that has and operates nuclear power plants
5. The JSE (with a market capitalisation of over $900billion is the largest stock exchange on the African continent. The Nigerian Stock exchange is the second largest with a market capitalisation of about $114billion.
6. The busiest and largest Airport in Africa is the Oliver Tambo airport in Johannesburg, which had over 18 million passangers in the year 2012/13. It can also accommodate the Airbus 380 – the largest commercial passanger plane in operation at the moment. Murtala Muhammed Airport in Lagos handled just over 7 million passangers for the year 2012/13. None of our airports (MMA included) can handle the Airbus 380.
7. GDP per capita for South Africa is about $6,800 whilst that of Nigeria (with the rebasing) will be about $2,600.
8. The biggest banks and telecoms companies on the contient are South African.
9. South Africa’s economy has a rating of BBB which is investment grade. Nigeria has a rating of BB-, which is three notches below investment grade.
10. For ease of doing business, out of 182 countries, South Africa is rated No.52 in the World, whilst Nigeria is rated 147.

I could go on and on. In a nutshell, we still have a LONG WAY TO GO.

Though in the long run the GDP will have a positive IMPACT on Nigerians; our government must realize that we cannot eat GDP and so unless there is a tangible improvement in the lives of our citizens, the new GDP figures mean nothing to the average nigerian.

Maybe our leaders need to consider the following GDP figures for 2013:

* Nigeria population is 170million with $420billion
* South Africa population is 52million with $400billion
* Hong Kong population is 7million with $263billion
* Italy population is 60million with $2trillion
* Singapore population is 5.4million with $275billion
* Sweden population is 9million with $524billion
* United Arab Emirate population is 9million with $349b
* Canada population is 35million with $1.8trillion
* France population is 64million with $2.6trillion
* UK population is less than half of Nigeria population, yet its worth $2.4trillion
* US population is less than twice that of Nigeria, yet its worth $16trillion.

Do you know that 170million Nigerians are not producing what 9million Swedish are producing?
Now let’s leave Nigeria for now and come down to Nigerians; I mean you. Are you PRODUCING or CONSUMING??

Carefully name ALL the things you consume daily and tick the ones you or any of your relative produce.

Now that you know the SOURCE of the problem. The question is, how do you want to tackle yours?

Victor Oyefeso
Saturday 08.03.14 13:49


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