Survey projects five per cent growth for Nigeria’s economy this year
The Nigerian economy is expected to grow by over five per cent this year, while the South African economy is forecast to grow by 1.6 per cent, according to a new survey by the Economist Corporate Network.
The ‘Africa is the horizon: the 2015 African Business Outlook Survey’, said that these growth- rate differences reflect, in part, the current state of infrastructure in each country, as well as the breadth, depth and stage of development of the formal economy in each country. The report was compiled by The Economist Corporate Network, the business advisory service of The Economist Group, which canvassed executives based primarily in the four biggest sub-Saharan economies – Nigeria, South Africa, Angola and Kenya.
It disclosed that by 2020 executives generally expect their top four markets to remain the same. The report said that the relative importance of Nigeria as the top market will grow, and, although South Africa will remain the second- largest market, its relative weighting will decline. “In 2020 Kenya’s importance to revenue contribution will be higher than Angola’s, particularly taking into account respondents’ expectations for primary, secondary and tertiary market positions”, it added.
“Over 60 per cent of respondents reported an operating profit of 10 per cent or more (in West Africa), and 26 per cent of respondents reported an operating profit margin higher than 20 per cent,” the survey said. “The next most profitable region is Southern Africa, where 57 per cent of respondents reported an operating profit margin above 10 per cent.” It added that executives reported East African operations as having the highest percentage of losses, at 15 per cent. Executives also named Nigeria, South Africa, Kenya and Angola as their top markets in 2014.
It indicates that ongoing economic growth is providing the underlying rationale for business optimism, with the Economist expecting sub-Saharan Africa’s gross domestic product (GDP) to expand by 4.5% in 2015, making it the world’s fastest growing economic zone, ahead of Asia’s regional average of 4.3 per cent. The group’s global expectation is for growth of 3.6%, supported by a recovery in the US and continued, albeit more moderate, economic expansion in key developing countries such as China and India.
The survey estimates that, over the coming five years, sub-Saharan Africa’s share of global GDP will more than double, from 1.4 per cent to four per cent by 2020. According to survey, the centre of the global economy has been shifting from the developed to the developing world over the past twenty years.
“In 2015, sub-Saharan Africa’s GDP is expected to grow at 4.5 per cent, making it the fastest-growing economic zone in the world, outpacing Asia’s regional average of 4.3 per cent annual growth,” it said. “Obviously, in terms of overall market size, sub-Saharan Africa is still quite a bit smaller than Asia, but, when considering the longer term, continued steady growth in Africa will result in an economic bloc with global impact over the next two decades.” The region’s two largest economies—Nigeria and South Africa—together compose over 63 per cent of sub-Saharan Africa’s total GDP.
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