Alongside its urgent focus on West Africa’s outbreak of the Ebola virus, the world should stop to notice a bigger, more basic African fact—the explosive growth of its economy and middle class—says one of the continent’s top economists. Two decades after Africa earned a reputation as the world’s economic basket case, accelerating growth has nearly tripled the middle class, and the continent “has gone from being a ‘lost cause’ to being nearly a hot prospect,” said the economist, who also is Nigeria’s finance minister, Ngozi Okonjo-Iweala.
Nigeria, Africa’s largest economy, is a clear example of an African pattern still beset by deep problems, but that includes a dynamism and opportunities not visible a generation ago, in the 1980s and ‘90s, Okonjo-Iweala told an audience of policy specialists, journalists and Africa-watchers at the Atlantic Council. Her appearance, for a speech and discussion with the audience, was co-sponsored by Thomson-Reuters.
“For the past decade, the country has been growing at an average of 7 percent per annum, driven by the strong growth in the non-oil sectors,” Okonjo-Iweala said. “It is time that we started thinking of Nigeria as not just … an oil and gas economy, but …as a very robust, diverse economy.”
Basic Reforms Yielded Growth
The country has unleashed that growth with the most basic steps—such as building basic administrative functions such as computerized land registries that permit the sale of a plot of land within weeks rather than months or years, the minister said. New highways have lubricated trade, cutting the travel time between the coastal centers of Benin City and Lagos from nine hours to less than three. And an embryonic national program to provide mortgages and encourage home mortgages promises to boost the housing sector while giving millions of Nigerians an unprecedented investment in the economy and stability of their own country, she said.
With 170 million people and the twenty-sixth-largest economy in the world last year, “with a GDP of $510 billion,” Okonjo-Iweala said, ““Nigeria is certainly an economic powerhouse and deserves to be a member of clubs of its peers, like the G20.”
Okonjo-Iweala listed critical challenges still facing her country. They included:
- “Inadequate infrastructure,” notably in housing and transport, is holding back growth.
- Nigeria’s growth has brought greater inequality and sustained poverty for tens of millions of its people. As measured by the economists’ “Gini coefficient,” inequality in Nigeria now is more extreme than in China and close to that of Brazil. Continued poverty amid economic growth has led poor Nigerians to ask, “Is it GDP that we are going to eat?” she said.
- Governance remains too opaque and too corrupt, “including the corrupt theft of our oil.”
- Nigeria faces serious “security challenge in the form of Boko Haram,” the militant Islamist militia that has taken over swathes of northeastern Nigeria and that last spring kidnapped hundreds of school girls from the town of Chibok, who remain missing.
World Bank research has shown that improvement in “agriculture is three times more effective in solving poverty than any other sector,” Okonjo-Iweala said, outlining efforts by the government of President Goodluck Jonathan to improve not only farming, but processing industries for the country’s produce. Both the Anglo-Dutch giant Unilever and Minnesota-based Cargill have invested in projects to process Nigeria’s cassava crop, she said.
Given the size of her country’s market, she told the audience, smiling, that her advice to international investors is that, “if you are not in Nigeria, You are not in Africa.”