Nigeria’s actual GDP growth rate for 2013 has been revised down to 5.49 percent from 7.41 pct previously estimated during a rebasing exercise, the statistics office said on Friday.

In a surprise data release, the office also said GDP growth for 2012 had been revised down to 4.21 percent from a previous estimate of 6.5 percent.

Nigeria overtook South Africa as Africa’s largest economy in April, after a rebasing calculation in April almost doubled its gross domestic product to more than $500 billion.

Most governments overhaul GDP calculations every few years to reflect changes in output, but Nigeria had not done so since 1990, so sectors such as e-commerce, mobile phones and its prolific “Nollywood” film industry, had to be factored in.

Nigeria, Africa’s most populous country with 170 million people, has been growing as an investment destination owing to the size of its consumer base and growing capital markets, but much of the attraction has been predicated on a growth rate of more than 6 percent.

Revising growth figures after a rebasing exercise is a complex task, say officials at the stats office, which explains the discrepancy in growth rates.

However, Nigeria’s growth rate is still way ahead of the continent’s other giant, South Africa, whose GDP growth was 1.9 percent in 2013 as it suffered badly from strikes at major mines.

“We expected that there will be a corresponding reduction in (Nigerian) growth … It’s much easier to grow when you are small than when you are big,” said Bismarck Rewane, CEO of Lagos-based consultancy Financial Derivatives.

But he added that the economy was still too heavily dependent on oil and vulnerable to price shocks.

“The Nigerian economy is narrower with oil as the dominant revenue earner. South Africa has a more balanced economy. The stage of development in Nigeria is still primordial, which makes our growth vulnerable,” he said.

There was no immediate reaction to the data in the equity or currency markets.

Source: Reuters

2014-07-13