Nigeria Ranked Top 20 economies by 2050.

Nigeria Minister of Finance, Dr. Ngozi Okonjo-Iwealareuters

Nigeria to be Ranked 13th among World’s Top 20 Economies by 2050, says PricewaterhouseCoopers Report.

PricewaterhouseCoopers (trading as PwC), a major international  accountancy and multinational professional services firm has issued a report that predicted that Nigeria will be ranked one of  top 20 largest economy in the world by 2050. With a projected GDP of almost $4 trillion by 2050, 6 percent growth and vibrant youthful population, Nigeria's economic future looks very promising and reassuring. But does Nigeria has what it takes to make it happen?

The report published by the Pricewaterhouse Coopers (PwC’s) macroeconomics team was based on the modeling approach that is anchored on the utilization of the  World Bank GDP data up to 2011 and  "medium term projections for real GDP growth between 2012 and 2017. We then use our long-term economic model to estimate trend growth rates from 2018 to 2050." PricewaterhouseCoopers projections are based on the below specific paradigm tabulation:

· Growth in the population of working age (based on the latest UN population projections).

· Increases in human capital, proxied here by average education levels across the adult population.

· Growth in the physical capital stock, which is driven by capital investment net of depreciation.

· Total factor productivity growth, which is driven by technological progress and catching up by lower

income countries with richer ones by making use of the latter’s technologies and processes.

The key point here is that it is a microeconomics projections based on econometric forecasting with sound empirical data. The probability advantage is there, but the certainty may not be there, for the outcome is not written on the stone. The bulk of the work must be done by Nigeria to become a powerful and sustainable economy by 2050.Nigeria must diversify her economy away from oil. An economy based on export of natural resources, oil in case of Nigeria is not the wave for the economy of 21st century. Moreover, all corners of the world are overflowing with oil and the coming of the nosedive of oil price and glut are inevitable.

At the interim, Nigeria's natural resources especially it's large earning from crude oil can do a whole lot of good when it is put into a good use especially in the provision of durable infrastructures. Oil can be an engine of development, PricewaterhouseCoopers report put it this way, "Nigeria could be the fastest growing country in our sample due to its youthful and growing working population, but this does rely on using its oil wealth to develop a broader based economy with better infrastructure and institutions (e.g. as regards rule of law and political governance) and hence support long term productivity growth – the potential is there, but it remains to be realized in practice."  This report reinforces that Nigeria vibrant and mammoth population is a thing of joy, when properly managed and geared into optimum productivity and wealth creation. But the youths must be encouraged and incentify to shy away from life of crime and violence.

Nigeria must keep her young and growing population educated and healthy. Poor educational facilities and inferior technological curriculum for schools will not cut it. Nigerian workforce must be familiarize with modern technology and technical know-how for them to take the advantage of the future opportunities. Nigeria must be able to compete with China and India for investments and capitals.

Nigeria realization of this prediction is also based on having a sound macroeconomics fundamental which includes low to moderate inflationary rate, a stable currency and implementation of an attractive and incentive-orientated fiscal policy that is commerce, investment and trade friendly. Nigeria needs a sustainable political economy stability that is rooted and planted on peace and prosperity. Naira can be safeguard and not be open for aggressive speculators to weaken it. Nigeria should accumulate an intimidating foreign reserve as a war chest to stabilize naira which is doable with arrays of export products other than oil.

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According PwC report, "The world economy is projected to grow at an average rate of just over 3% per annum from 2011 to 2050, doubling in size by 2032 and nearly doubling again by 2050.". In this case, Nigeria has a good prospect because her economy is projected to grow at 6 percent or even more  in the future and Nigeria has the advantage because many sectors of the economy that needs to be improve and can attract more capitals and investments.

While China and India are making their biggest gains by 2050, many other economies including Brazil, Poland, Mexico, Indonesia, Vietnam and South Korea are becoming economic powerhouses on their respective regions and on global economic theater. The PricewaterhouseCoopers report stated that:

"China is projected to overtake the US as the largest economy by 2017 in purchasing power parity (PPP) terms and by 2027 in market exchange rate terms. India should become the third ‘global economic giant’ by 2050, a long way ahead of Brazil, which we expect to move up to 4th place ahead of Japan. Russia could overtake Germany to become the largest European economy before 2020 in PPP terms and by  around 2035 at market exchange rates. Emerging economies such as Mexico and Indonesia could be larger than the UK and France by 2050, and Turkey larger than Italy. Outside the G20, Vietnam, Malaysia and Nigeria all have strong long-term growth potential, while Poland should comfortably outpace the large Western European economies for the next couple of decades".

Nigeria policy makers should see this report as a clarion call to be ready and alert to put her house in order and to set her priorities right. The path to a powerful economy by 2050 is paved with discipline, hard work and supreme dedication. The problems of corruption and mismanagement must not be given the room to side track this radiant projection.

2050 Projected  GDP at PPP  (2011 US$bn)

1. China 53,856

2. US 37,998

3. India 34,704

4. Brazil 8,825

5. Japan 8,065

6. Russia 8,013

7. Mexico 7,409

8. Indonesia 6,346

9. Germany 5,822

10. France 5,714

11. UK 5,598

12.Turkey 5,032

13.Nigeria 3,964

14. Italy 3,867

15. Spain 3,612

16. Canada 3,549

17. South Korea 3,545

18.Saudi Arabia 3,090

19. Vietnam 2,715

20. Argentina 2,620            (Source: PwC)

BRICS reach deal over development bank which will change the balance of power

Deal by emerging nations meeting in South Africa one of several moves to challenge Western-backed monetary institutions.

The BRICS grouping of emerging powers have reached a deal to establish a development bank that would rival Western-backed institutions. "It's done," South African Finance Minister Pravin Gordhan said after meeting with his counterparts from Brazil, Russia, India and China. BRICS FACTS Economic data shows that the grouping of Brazil, China, India, Russia and South Africa now account for 25 percent of global GDP and 40 percent of the world's population. China has become the informal leader of the group. With a GDP of $8.25 trillion in 2012, the IMF estimates that the Chinese economy will climb by a whopping 8.2 percent in 2013.It remains the globe's most-populated country, with 1.34 billion inhabitants. Brazil: With a GDP of $2.425 trillion in 2012, Brazil is the world's seventh largest economy. It holds only a modest place in world trade activity, however, and experienced sluggish growth of one percent last year. Russia: Ranking ninth on the list of the world's biggest economies, Russia accumulated a GDP of $1.953 trillion in 2012, boosted mainly by its gas exports, making it the world's eighth largest exporter. India: Despite its population of 1.24 billion, India remains a smaller player among the world's economies, falling into a 10th place with a GDP worth 1.946 trillion. South Africa: Smallest of the BRICS economies is South Africa. Placing 41st world exporters, the country has a GDP of $390 billion and a population of 50.5 million. "We made very good progress, the leaders will announce the details," he added, just hours before the opening of a BRICS summit in the South African port city of Durban on Tuesday. But Russian Finance Minister Anton Siluanov said that the group's ministers were unable to agree on some of the details of the project. "A decision on the location of the bank and funding still needs to be made," he told reporters in Durban, adding that further steps would be required before the BRICS development bank could be created. Together the BRICS account for 25 percent of global GDP and 40 percent of the world's population. But members say institutions such as the World Bank, the International Monetary Fund and the UN Security Council are not changing fast enough to reflect their new-found clout. Disputes remain over what the new bank will do, with all sides trying to mould the institution to their own foreign or domestic policy goals, and with each looking for assurances of an equitable return on their initial investment of about $10bn. China and Brazil also signed an agreement at Tuesday's meeting to do billions of dollars of trade in their local currencies, as the BRICS nations work to lessen their dependence on the US dollar and euro. Finance ministers Lou Jiwei of China and Guido Mantega of Brazil signed the deal, amid the continuing euro crisis and little signs of growth in the West. 'Positive headway' Xi Jinping, who has underscored the growing importance of the group by making Durban his first summit as China's president, had earlier expressed hopes for "positive headway" in establishing the bank. South African President Jacob Zuma has lauded the summit as a means of addressing his country's chronic economic problems, including high unemployment. "BRICS provides an opportunity for South Africa to promote its competitiveness," Zuma said in a speech on the eve of the summit. "It is an opportunity to move further in our drive to promote economic growth and confront the challenge of poverty, inequality and unemployment that afflicts our country." In a keynote speech in Tanzania on Monday, Xi pledged Beijing's "sincere friendship" with the continent, and a relationship that respects Africa's "dignity and independence". If initiatives such as the bank succeed it would send a loud message to the US and European nations that the current global balance of power is unworkable.

OPIC approves $288 million for two wind power projects

03/24/2013

By RECORDER REPORT

The Board of Directors of the Overseas Private Investment Corporation (OPIC) approved a total of $288 million in financing for two wind power projects poised to deliver much-needed electricity to Pakistan and Peru. Affirming OPIC's commitment to support efforts by Pakistan, OPIC President and CEO Elizabeth L. Littlefield said OPIC it would help diversify its energy production to include important contributions from renewable energy sources, says a press release issued on Saturday.

"The wind power projects will enable both countries to take advantage of their massive renewable energy potential to help meet unmet demand for electricity," Ms Littlefield continued. "We are thrilled to partner with innovative US companies to bring these highly-developmental projects to realisation. "The provision of clean and reliable electricity is an essential building block of any economy," she added.

The OPIC credit facility would help build a 50MW wind power plant in Gharo-Ketti Bandar Wind Corridor, designed to generate 133 Giga Watt hours of emission-free electricity annually. Using GE Wind turbines, the Sapphire Wind Power plant would help Pakistan diversify its power generation beyond reliance on high-priced fuel oil by tapping vast renewable energy potential, which the corridor alone possesses generation capacity of over 132,000MW - virtually equal to the world's entire installed wind capacity for 2010.

To date, OPIC has supported more than $200 billion of investment in over 4,000 projects, generated an estimated $75 billion in US exports and supported more than 277,000 American jobs.

Talking about the OPIC financing the CEO AEDB, Arif Alauddin stated that he has been trying for OPIC funding for Pakistan projects for some time, and is glad to see it coming now. OPIC is already funding a SSJD Energy's 12MW Baggass based Renewable Energy Project in Pakistan.

In the wind sector, following Sapphire, Fina Energy of Turkey is the next project in the OPIC pipeline for Pakistan. CEO AEDB also stated that RE has already become the sector attracting the largest investment of any sector in the country. He expects that in the next two years Thatta alone will attract more than $2 billion in wind sector. This amount is expected to increase as soon as the solar tariff is announced.