Lagos - "There's more to life than GDP (gross domestic
product)," is a favourite refrain of left-leaning social commentators and
environmental activists.
But when it comes to geopolitics, there are few better ways
of establishing dominance than by seeing whose is number one.
Nigeria plans to rebase its GDP calculations later this
year, a move which insiders say will push the size of its economy up by 40%,
bringing it close to South Africa's.
The potential turnaround will add fuel to a longstanding
contest between the two nations to be Africa's undisputed leader, and
eventually its voice at the United Nations, which periodically ignites rows
between them.
By the end of this year, at least assuming oil prices don't
collapse, Nigeria and South Africa should be approaching par in dollar terms:
$370bn and $390bn, respectively.
With Nigeria growing at 7% a year and South Africa at less
than half that, Nigeria could be ahead in just a few years.
Nigerians are hoping this will translate into more prestige
on the world stage - as happened on a grander scale to China, when its GDP
started dwarfing those of established world powers.
It will certainly wake investors up to the opportunities in
Africa's most populous country and biggest energy producer.
"The country becomes unavoidably on the radar for
anyone looking at Africa opportunities," said Fola Fagbule, Africa Finance
Corporation vice-president for origination and coverage.
Nigeria has work to do if it wants to leverage this new
profile. In international eyes the nation remains a byword for corruption and
sleaze - a perception reinforced by a recent $6.8bn scandal over fuel
subsidies.
South Africa is meanwhile seen as one of the few African
destinations where the rule of law safeguards investments.
"I hope a larger GDP will increase pressure on
government to do things right, to be more transparent," said Fagbule.
"More likely, we'll see a lot of chest beating,
bragging about how we are the giant of Africa - even though we do things
terribly."
Graft, diplomacy
Though governance is worsening in South Africa, it has a
long way to go before it crosses places with Nigeria on the Transparency International
corruption perceptions index.
South Africa has sunk 29 places in the gauge of perceived
corruption since 2001, from 38th in the world to 64th last year.
But Nigeria was 143rd out of 183 places in 2011, and the
sheer scale of its graft has led some analysts to ask whether government
statistics on things like GDP can even be trusted.
“In Nigeria, (fuel subsidy) fraud of $6.8bn can go on
without anyone really noticing or minding or it impacting official GDP,” said
Antony Goldman, head of PM consulting.
"It must have had a huge impact, and yet apparently you
can't find it in any of the data."
Nigeria is also competing with a South Africa that has put a
great deal of effort into being seen as champion for Africa and developing
countries in things like trade talks - its membership in the Brics (emerging
market group including Brazil, Russia, India and China) has helped boost that
aim.
A bigger GDP won't automatically help it win that contest.
Geopolitics aside, what will being Africa's giant mean for
most Nigerians? Not much. Despite one of the top economic growth rates, poverty
in Nigeria has been increasing.
"In practical terms will recalculation make much
difference? Possibly in diplomatic terms, showing Nigeria's power. Will it make
Nigerians feel richer? I doubt it," Goldman said.
The limits of GDP?
Unorthadox economists like Joseph Stiglitz have long argued
that GDP is "a poor measure of well-being", because it fails to
capture things like health, income equality and the environment.
South Africa's GDP per capita is six times Nigeria's and on
most counts of quality of life, it scores better. Roads are good, tap water
drinkable, and the power supply usually ample even if the grid is almost
stretched to capacity.
Nigeria's roads are potholed, its water polluted and its
power stations generate less than a mid-sized European city.
"In terms of economic development, Nigeria has far to go
to catch up with South Africa. An increase in GDP is not going to suddenly
change that," said Standard Bank’s Samir Gadio.
Nigeria also has one of the world's worst records on
environmental protection. The Niger Delta, a labyrinth of tropical swamps home
to hundreds of bird species, is a place where energy majors spill huge
quantities of oil with impunity.
Frequent pipeline attacks by oil thieves leak even more.
South Africa, by contrast, has some of a the toughest laws
to protect its wilderness in Africa. A rhino poaching epidemic to feed East
Asian demand for quack medicines may be testing its resolve.
In Nigeria, though, the rhino is long since extinct.