Reactions trail IMF report that Nigeria’s economy now biggest in Africa

Financial experts in the country have been reacting to the news from International Monetary Fund (IMF) that Nigeria economy still remains the biggest in Africa.

It will be recalled that the recent estimates by the IMF has shown that Nigeria remains the biggest economy in Africa, followed by South Africa and Egypt. The World Economic Outlook for October 2016 which puts the Nigeria’s Gross Domestic Product (GDP) at $415.080 billion, from $493.831 billion at the end of 2015 also put that of South Africa at $280.367 billion, from $314.732 billion a year earlier and that of Egypt remained at $330.159 as at 2015.

Speaking with Business247 News Online, the Management Director of Cowry Assets Management Ltd., Mr. Johnson Chukwu, asked Nigerians not to lose sleep over the issue since the loss of the number rank does not take away the fact that Nigeria’s economy is a large economy.

“The construction capacity is huge. Yes, we may face a temporary setback in form of inflation, but the focus of the government at this stage should be coming up with economic policies that would rejuvenate and strengthen the economy. How do we restore growth? How do we diversify the economy so that ultimately, the naira will recover or appreciate and then achieve a better standing than what we have today?” He stated that should be the priority of the government.

Chukwu is of the view that it is only when the economy recovers that the currency will be strengthened.

Also speaking, the Director General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Lawal, opined that the figure is debatable, noting that the contraction in the economy early this year was under .3.6 per cent. “The contraction was not up to 1 per cent. There is no way the size of our economy would have crashed by that size.

“Granted that we have challenges in our economy, that does not mean, we would have crashed to that level. “However, looking at the fact that naira has depreciated more than 70 per cent; one can say the report could be right. But in real sense of our economy, it couldn’t have been this bad.”

The Director General of Nigeria Employers Consultative Association (NECA), Segun Oshinowo, however, stated that the devaluation of the naira must have been responsible for the slide.

“The devaluation must have wreaked the havoc for us, since the valuation is done in dollar. Our currency has lost significantly and for the past two years, our economy has not grown,” he said.

He noted that for Nigeria to regain its position, it would need to diversify the economy, look at the basic fundamentals as well as give serious thought to developing the social and physical structure‎ in the country.

He wondered what the rebasing has added to the country, saying, “What is really the main significance to us other than ego as the biggest on the continent. We need to look at World Bank variables. The issue of biggest shouldn’t be but what has happened to our unemployment level and our standard of living. Countries like Norway, Netherland and Switzerland are not the biggest in Europe but their standard of living rank among the biggest in the world. That is what we should be looking at.