Nigeria Minister of Finance, Dr. Ngozi Okonjo-IwealareutersNigeria 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)
