* Nigeria's economy worth more than $500 billion
* Debt to GDP ratio shinks after rebasing
* Investor interest piqued, but Nigerians shrug
* S.Africa, Nigeria vying to be 'voice' of Africa
(Adds details, quotes, background)
By Chijioke Ohuocha
ABUJA, April 6 Nigeria has overtaken South
Africa as Africa's largest economy after a rebasing calculation
almost doubled its gross domestic product to more than $500
billion, data from the statistics office showed on Sunday.
GDP for 2013 in Africa's top oil producer was 80.22 trillion
naira, or $509.9 billion, the Nigeria Bureau of Statistics said,
up from the 42.3 trillion estimated before the rebasing.
The new figure shrank Nigeria's debt-to-GDP ratio to 11
percent for 2013, against 19 percent in 2012, statistics chief
Yemi Kale told reporters in the capital of Abuja.
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 - now worth 1.4 percent of
GDP, Kale said - had to be factored in to give a better picture.
Growing attention from foreign investors was forcing Nigeria
to more accurately calculate its statistics, including GDP, Kale
said, adding that the base year would now be recalibrated every
five years, in line with global norms.
Nigeria, Africa's most populous country with 170 million
people, has been growing as an investment destination owing to
the size of its consumer market and growing capital markets.
The jump in the official GDP figure ranks Nigeria as 26th
biggest economy in the world, up from 33rd before the rebasing,
Kale said. It comes at a time of rising investor interest in the
African continent's growth potential and expanding middle class.
Finance Minister Ngozi Okonjo-Iweala told Reuters last week
that billions of dollars of foreign and domestic investment were
envisaged for this year, including $1.5 billion in agriculture.
But political risks as Nigeria approaches what will be hotly
contested elections next February remain a concern, as do
multiple security headaches, especially an insurgency waged by
Boko Haram, an Islamist sect, in the under-developed northeast.
Analysts said the recalculated GDP would raise Nigeria's
profile, but change little on the ground.
"Is the money in your bank account more on Sunday than it
was on Saturday? If you had no job yesterday, are you going to
have a job today?" asked Bismarck Rewane, CEO of Lagos-based
consultancy Financial Derivatives.
"If the answer to those questions is 'no', then this is an
exercise in vanity," he added, though he said the new figure was
Many Nigerians shrugged off the GDP news.
"I'm not really impressed. I don't feel it in my pocket,"
said Richard Babs-Jonah, 47, a small farmer, rubbing his thumb
against his index and middle fingers to signify cash, before
fumbling in his pocket for small change to buy traditional
'suya' - spicy grilled meat served at roadside barbecues.
"It's not the masses who are rich. Those controlling the
economy, those with government contracts, get all the money," he
added, expressing the common view that Nigeria's economy is
rigged in favour of a handful of well-connected oligarchs.
Though GDP per capita rose to $2,688 last year from an
estimated $1,437 in 2012, poverty and inequality widened.
"We need to work hard on infrastructure, governance,
corruption and building a social safety net," Okonjo-Iweala
said. " Inequality has been rising."
Services replaced farming as the biggest sector, worth 41.9
trillion naira, compared with 17.6 trillion naira for farming.
Most services growth came from telecoms and real estate.
Nigeria's annual GDP growth for 2013 is expected to come in
at 7.41 percent after the rebasing, compared with about 6.5
percent in 2012, Kale said.
NIGERIA VS SOUTH AFRICA
Nigeria's taking the title of Africa's biggest economy will
fuel a longstanding rivalry with South Africa.
South Africa currently represents Africa at the G20, as well
as in the "BRICS" group of the most powerful emerging economies,
which also includes Brazil, Russia, India and China. Nigeria may
argue that it should join those clubs too.
It will also enliven competition for investor capital at a
time when South Africa faces challenges such as striking workers
and high current account and budget deficits.
Despite its roaring growth of recent years and now a bigger
GDP, Nigeria still trails South Africa in basic infrastructure -
power and roads - necessary to lift its people out of poverty.
Its mobile telephone network is one of the least reliable in
Africa, internet quality is poor, roads are potholed and its
ports and airports clogged by bad infrastructure and obstructive
officials. The power grid provides barely four hours a day.
President Goodluck Jonathan's suspension in February of
respected central bank chief Lamido Sanusi after Sanusi had
questioned massive oil revenue leakages at the state oil firm
reinforced Nigeria's reputation as a byword for corruption.
South Africa, by contrast, is seen as one of few African
destinations where the rule of law safeguards investments.
By every measure, South Africa has a more sophisticated,
developed and diversified economy, with advanced financial
markets, while Nigeria relies heavily on oil. But investors say
South Africa cannot afford to be complacent.
"South Africa was historically the 'go-to' country for
investment in Africa. However, the reality is that other regions
are increasingly asserting their economic voice," said Roelof
Horne, a portfolio at Investec Asset Management in Cape Town.
(Writing by Tim Cocks; Editing by Gareth Jones)