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Is Nigeria A Truly Wealthy Nation? See What Economic Facts Say

In 2003, Dangote set out to build his first cement plant with a budget of about $480 million. On completion of the project in 2007, he had borrowed an extra $175 million, built a dam, a gas pipeline (92km long) and more than 400 new houses. But guess what? No Nigerian bank was big enough to fund this project. In fact, the capital in more than 90% of the banks in Nigeria that year was just a little over $20 million. He had to look elsewhere.

Is Nigeria A Truly Wealthy Nation? See What Economic Facts Say

Simple Economic Terms

GDP — in straightforward terms, the GDP or Gross Domestic Product is the monetary value of all finished goods and services in a country within a specific period. It is used to estimate the size of an economy and growth rate.GDP per capita — If all the money Nigeria made in a year was split evenly amongst every single Nigerian, what each person gets is called the GDP per capita.National Budget — The government gets money from taxes and fees and spends it on things like healthcare, infrastructure, education and general expenditures.

Nigeria’s Economy

Poverty level by State in Nigeria (image 1)

Nigeria has the largest economy in Africa with a GDP of $398 billion compared to its closest competitor; South Africa, which has a GDP of $368 billion. However, the real wealth of a nation is calculated by its GDP per capita, and Nigeria ranked 140 out of 186 in GDP per capita global ranking.

Nigeria’s GDP per capita stands at $1,963 compared to South Africa’s $6,100 and Egypt’s $12,000. (Luxembourg ranks the highest in the world with GDP per capita of $144,000).

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Nigeria is one of only 8 ‘World Bank red zones’. These are the only countries on the planet where GDP per capita (an indicator of individual share of wealth) has fallen steadily over the past 20 years.

Nigeria’s budget for the health sector in 2018 was $938 million for a population of over 190 million people compared to South Africa’s $17.6 billion for a population of just 56 million people. This means that as an average Nigerian, the government’s health budget for you for a whole year was just $4.5. Don’t forget the UK which set aside over $250 billion for the healthcare of its citizens in the same year (more than 10x Nigeria’s entire 2018 budget). That means each citizen was entitled to health funds of $4,000.

How did others do it?

You see, money is a coward; when money goes somewhere, and there’s trouble, money runs away. But when it goes to a place, and there is peace, it stays there. You don’t see money go to Iraq or Syria or Afghanistan, but you see it go to the UK, Singapore, London, China, etc. If you scare money, it runs away.

China Poverty Decline from 1981–2005 (image 2)

In a single generation, China has had over 600 million people move out of poverty. Three hundred million people (about the population of the US) move from rural to urban areas every ten years. This is because China is still experiencing its economic take-off phase; this describes a situation where the majority of the working population move from agricultural jobs to tech and industry and move from the country-side to cities.

The level of urbanisation that took place in China in 22 years is equivalent to the UK’s level that took 120 years and USA that took 80 years. So maybe there is hope for Nigeria.

Other Indicators

Number of Billionaires in China — 2015 (image 3)

According to BBC, China produces two (2) new billionaires every week and one million (1,000,000) millionaires every year.

Meanwhile, according to the NDIC, 98% of Nigerians don’t have up to N500,000 ($1,250) in their accounts. According to Mckinsey & Co, only 2m people in Nigeria have purchasing power and annual incomes over $10,000.

2. In India, the city of Mumbai alone has almost 60,000 millionaires; meanwhile, in Nigeria, there are just 12,300 millionaires in the entire country.

3. One of the measures for the economy and middle class of a society is the records of airport passengers compared to its population. In one year, Nigeria had 15.2 million airport passengers compared to Singapore Changi Airport, which served over 65 million passengers. (Singapore population — 5.6 million). The metropolis of Shenzen alone in China had over 400 million airport passengers in a single year. (Shenzen population — 12.5 million)

4. South Africa’s fourth-largest bank — Nedbank has a market cap of $72 billion. This is bigger than the market cap of all the banks in Nigeria put together, including GTB, Zenith, FirstBank and Ecobank.

So what do we do?

The real wealth of a nation is in its people and like Dangote would say, “Nobody will fix Nigeria for us until we take the lead”. One of the greatest assets that have helped China and India grow is its population.

So is Nigeria a truly wealthy nation? The answer is No. However, it can be so. If an average Nigerian produces half the GDP per capita of the average UK citizen, our GDP will not be $398 billion but $3.9 trillion.

The growth of businesses drives the economy, and therefore, the government must put in place suitable policies to promote business growth. We must increase our productivity as a nation. And it begins with you. Do better, work smarter and grow bigger.

Written by Klein Udumaga.


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