Nigeria, with approximately 15 percent of Africa’s population, holds the key to unlocking Africa’s growth potential, Jim O’Neill, chairman, Goldman Sachs Asset Management, said recently in Lagos.
If Africa could behave more together economically, “then by 2050, BRICs (Brazil, Russia, India and China) would become BRICA from an economic perspective,” said O’Neill, who was in Africa last week for three days. He was specifically in Lagos and Abuja in Nigeria, and Cape Town and Johannesburg in South Africa.
In an interview with Financial
Times, he said “the development of the continent rests in part on the rise of oil rich Nigeria, home to 20 percent of the continent’s population. Whether it happens or not will actually depend more on Nigeria.”
However, to harness the boom, he advised that African leaders must improve technology, education and the rule of law, including reducing corruption.
Nigeria lies at the centre of this bull case, according to O’Neill, who coined the BRIC acronym more than a decade ago.
Nigeria’s 170 million people, mean one in seven people on the continent is a Nigerian, while it is “very exciting that its population which could match the USA by 2050 yearns for a better standard of living,” said O’Neill, saying “in the short time I spent in both cities, I met with the country’s top policy makers and business people, and it is impossible not to get caught up in the enthusiasm.
“I think the future looks promising.” The bear case however would be that delivering on this potential is quite hard, as “the extremely low Growth Environmental Scores (GES) produced by GS Global ECS Research show the reality of today versus the hope and excitement of the future,” he said.
According to him, “dramatically improving education, significantly extending the use of all technologies (not just mobile phones) and, of course, improving the rule of law, stability of government and reducing the scale of corruption – these are requirements for the potential to be realised.”
A role for South Africa was to act to use its more advanced financial markets to “help build cross-border capital and trade flows” and play their own part in allowing the continent to be more economically attached, he said.
According to O’Neill, Nigeria’s share of global gross domestic product would move from less than 1 percent in 2020, to over 3 percent by 2050, while South Africa’s share of global GDP would remain be the 1 percent range by 2050.
Africa is projected to grow at 6 percent per annum between 2011 and 2020, according to International Monetary Fund (IMF) data.
This compares with average global growth rate of 4.1 percent for the same period.
PATRICK ATUANYA
with wire reports
