Watch the Throne: Nigeria is Now leading Africa in GDP

Photo Courtesy of Zouzou Wizman:
Photo Courtesy of Zouzou Wizman:

Nigeria has catapulted ahead of South Africa for the title of largest economy on the African continent. On April 6, Nigerian government officials announced that they had revised their 2013 GDP calculation to the tune of $510 billion. But in 2012 the World Bank estimated Nigeria’s GDP at $262 billion. So what can account for this rapid change? The answer lies in how the Nigerian government did the math.

The process is called “rebasing.” To calculate any country’s GDP, economists must first set a base year on which to model the economic growth. Then economists try to paint a picture of the economy in that year by studying different industries like agriculture, energy, and manufacturing. In the years to come, economists look at how these industries have grown. All GDP calculations, sometimes many years later, are based on this initial point of reference. However, this system of measurement does not account for the informal economy. Nor does it account for rapidly developing sectors such as telecommunications and film—industries that have sprung up in Nigeria over the last 20 years.

Nigeria’s model year was 1990. The new base year is 2010. As we will see, much has changed in the Nigerian economy since 1990. New industries have emerged and historically strong industries have fallen. Thus far, the World Bank has supported Nigeria’s recalculation. It is recommended that a country rebase its GDP numbers every five years. Since Nigeria has held off for so long, the change was quite drastic. Nigeria saw the highest gains in the service industry. The agriculture, oil, and gas industries decreased in terms of percentage of GDP. Telecommunications shot up from less than one per cent to 8.7% of GDP. The Nigerian film industry, known as Nollywood, makes up about 1.2% of GDP.

Sadly, despite these good numbers, the average Nigerian citizen will not see improvements in their quality of life. South Africa, who Nigeria unseated from the throne, has a GDP per capita of $7,336, a long way from Nigeria’s $3,000 (and that is with the new rebased numbers). There is still corruption, terrorism, power outages, and vast inequality in Nigeria. Many have criticized the new calculations, saying that nothing will ultimately change for poor Nigerians. What the new numbers can do, however, is open the door to more Foreign Direct Investment. As Africa’s largest economy, Nigeria has put itself in an advantageous position in the world marketplace by calling positive attention to themselves. As Forbes recently reported, the country is full of potential. They have a growing educated class, energy reserves, and a spirit of entrepreneurship. But as of today it seems that there remains many political and institutional barriers to overcome.


New Trends in Migration: South African Case Study

As our world becomes more globalized and inter-connected, people – and their ideas, possessions, and cultures – are becoming more mobile.  International migration is becoming an increasingly important part of international development, as well as individual states’ policies.  The number of international migrants increased from 150 million in 2000 to 214 million in 2012.  Migration affects almost every country in the world, and 49 percent of migrants globally are women.  And the World Bank predicts that, as populations age and shrink in developed countries while increasing dramatically in developing ones, international migration will continue to grow as a global phenomenon.

Immigration lines at a Japanese airport
Immigration lines at a Japanese airport

However, the International Organization for Migration’s (IOM) 2013 World Migration Report, launched on September 13 in Geneva, states that “migration remains inadequately integrated into development frameworks at national and local levels, and public perception of migrants and migration are often very negative.”  This report uses Gallup World Poll data from over 150 countries to examine how migration affects individual well being, expanding this field beyond traditional economic perspectives.  It also corrects the common assumption that most migrants move from developing countries to developed countries (South-North).   Instead, the data shows that “at least one-third of migrants move from one developing country to another and 22 percent migrate from one developed country to another” (South-South and North-North).  South-South migrants had the worst outcomes and were often unable to afford basic necessities, even after many years.

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Fiat Lux: Observations on the Power Africa Initiative

Despite posessing only 12% of the world's population Sub-Saharan Africa accounts for nearly 45% of those without access to energy.
Despite constituting only 12% of the world’s population, Sub-Saharan Africans account for 45% of those without access to electricity.

“God said, Let there be light: and there was light. And God saw the light, and it was good; and God divided the light from the darkness.” Although this verse from the Book of Genesis has been recited to the point of being a hackneyed cliche in energy literature, it nonetheless speaks to two powerful truths; that light—a pure form of energy—is good, and that it is ever-present. This statement is taken as gospel by many in the developed world, as a proclamation of energy’s abundance and virtue.  Indeed, other than a handful of outlying commentators, few would deny the former quality and even less the latter. For an appreciative American consumer—who pays some of the lowest energy rates in the world—such a system must seem nothing short of providential. This providence, however, is hardly universal, indeed as Genesis proclaims the light has been divided from the darkness. For many without light, without energy, this line of demarcation is the Sahel region of Africa, separating Sub-Saharan Africa from the rest of the world.

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Just Another BRICS in the Wall

In 2001, Goldman Sachs analyst Jim O’Neill coined the term BRIC to loosely align a group of rapidly growing emerging economies in Brazil, Russia, India and China. In 2010 this group was expanded to also include South Africa, forming the acronym BRICS.

The economic clout and influence of BRICS nations is staggering. Collectively, the five BRICS nations account for 42% of world population, 20% of output, and nearly all of current growth in the global economy.’ And they are looking to capitalize on this collective influence. During the most recent BRICS summit, these countries met in South Africa to begin the unprecedented steps toward establishing BRICS institutions. Out of this, the measure that has garnered the most attention is their plan to form a new international Development Bank to rival the Western dominated IMF and World Bank. Funded by BRICS nations, the aim is to deliver infrastructure and aid to developing markets by bypassing traditional Western structures.

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Developing Countries Look To The Cloud

With the emergence of Google Drive, Dropbox, iCloud, and Chrome OS cloud computing is well on its way to becoming a necessity in most people’s life in the developed world. It allows for rapid sharing of documents and automatic back up of family pictures and school papers. But cloud computing is capable of much more: it now also allows for the actual applications and programs we use every day to be stored away from our personal computers and accessed through the web. IT-programs are increasingly accessed through the web instead of being physically shipped in a box and manually installed on your own computer.

Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.

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Building BRICS of Foreign Aid: Newest Member of the Club

South Africa: To BRIC or not to BRIC?

The term “BRIC” was first coined by Goldman Sachs economist Jim O’Neill in reference to the group of emerging economies that O’Neill thought had the potential to become an economic bloc rivaling the industrialized economies over the course of the next century. While not originally used to refer to a political alliance of these countries, the term BRIC has been co-opted by the countries themselves who now hold summits to discuss issues of common concern to emerging economies.

A few years ago South Africa began to lobby the other BRIC countries to be admitted to the group.  In 2010, it got its wish and an ‘S’ was added to the end of the BRIC acronym. But even now that South Africa is formally a member of the club, many people question whether it makes sense to think of South Africa in this way.  Is South Africa a future economic powerhouse with the same economic potential as the other BRIC countries?

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Winning the War on Malaria: Part One

Distribution of malaria by country.

Malaria is one of the greatest challenges facing developing nations. Each year, there are an estimated 300-500 million new cases of malaria, killing 1.2 million. It is a disease that disproportionately affects the poor in countries with tropical and sub-tropical climates, with most cases reported in Asia, Africa, and Latin America. The direct costs to individuals and governments for treating malaria have been estimated at $12 billion per year. If the indirect costs were considered, it would be many times greater due to lost wages, productivity, and economic growth.

Global spending to prevent and control malaria has amounted to $5.5 billion annually, a large amount given by official development assistance agencies in Europe and the U.S. Lately, however, there has been a growing role for Public-Private Partnerships such as The Global Fund to Fight AIDS, Tuberculosis, and Malaria and the Medicines for Malaria Venture. Philanthropic organizations such as the Bill and Melinda Gates Foundation and Exxon Mobil have made large contributions to malaria control efforts as well. Continue reading