Saturday, July 16, 2011

A changing of the guard in African business?

In a previous post, I listed a group of ten African countries that had attracted significant foreign investment in the past, and noting that three of the countries (Tunisia, Egypt, and Libya) were presently unstable politically.

Two of the ten countries that WERE stable were South Africa and Nigeria. Nigeria has the largest population - 125 million in this undated estimate, compared to 44 million for South Africa. However, South Africa is the clear leader in GDP, according to this undated estimate - South Africa tops the continent with a GDP of $456,700,000,000, while Nigeria is fifth at $114,800,000,000.

Now I'll admit that when I think of "Nigerian business," I often think of the brother-in-law of a deceased government minister who needs a little favor. But that isn't necessarily an accurate picture of the country's business climate. Robyn Curnow notes:

[A] new Morgan Stanley report ... predicts Nigeria’s economy will overtake South Africa’s as Africa’s largest by 2025.

Now predictions are just that, and there are many factors that could alter this timetable. The fact that 80% of Nigeria's gross domestic product depends upon oil introduces a potential for huge volatility in future growth.

But if Nigeria can diversify its economy, who knows?
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