Contrary to the $494 billion gross domestic product (GDP) estimate of the Nigerian economy by the World Bank, a recent report posits that Nigeria’s GDP might be conservatively put at $1.7 trillion.
Dr. Akintoye Akindele, Founder & Chairman of Platform Capital; Founder & CEO of Duport Midstream; Founder, CEO & Chairman of Atlantic; Chairman of Unicorn; Co-Chair of WhiteSpaceX, Chairman of Diatom Impact, and Founder of Synergy Capital Managers & Advisers disclosed this recently while delivering a lecture titled: Betting Big on Africa. It was a presentation at the Africa Business Convention 2022.
Dr. Akindele, CFA said Nigeria’s GDP far exceeds $494 bn. He stated that some important informal sectors contributing to the Nigerian economy are not captured. He, therefore, called for the rebasing of the economy, having done so more than 10 years ago.
“New sectors have emerged: fintech has grown; same with media and entertainment, fashion, food, sports, and gaming have all grown. In essence, if we adjust this GDP today for real PPP gain, Nigeria’s GDP should be over $1trillion,” he said.
Akindele said technology, fashion, informal financial services and channels, agritech, renewable energy & solar systems, and many others have added in no small way to the Nigerian economy over the past 10 years.
He further argued that cash and liquid instruments are still the dominant means of exchange and trade. “The economy has, based on estimates, a larger informal market than the formal market that is yet to be captured in formal computations but generates billions of dollars in trading volume and value daily; money in circulation only accounts for 25 percent of GDP – further buttressing our point that we are bigger than we are aware when the value ascribable to real economic activity is brought on stream.
“Our conservative estimate of the real size of the Nigerian economy is $1.77 trillion,” he added.
On the wider analysis, Akindele said, “UNCTAD estimated intra-African trade in 2017 at $126 billion. How is this even possible? This means that on an average, an African country trades just about $2.34 billion with other African countries. This is impossible! The informal sector trade between border cities in border countries such as Nigeria – Benin; Ghana – Togo; Togo – Cote D’Ivoire, Tanzania – Kenya among many others is mostly not captured in this data. The daily volume and values of these trades alone is easily 10 – 20 times what is published and carried in poplar statistics and research houses.”
Harping on the potential for further growth of the Nigerian economy, Akindele said investment thesis that will drive inclusive economic growth in Nigeria in particular, and Africa at large has to be consumer-led, focusing on key sectors with investment themes and styles that would win simple, inclusive and consumer-led cost-effective, region agnostic ecosystem.