Africa’s largest economy smaller than London’s

 

We have recently learned that following a recalculation of GDP for Nigeria, it emerged last year as Africa’s largest economy with a GDP of $509 billion.  It overtook South Africa in terms of total output, but still remains a long way behind in per capita income given the much greater population in Nigeria.

What should give us pause for thought is how small this output still is for a country of 170 million people. It means Nigeria’s output is still lower than London’s, with just 8 million people. It should put our criticisms of the UK economy into context, and reminds us how much more there is to do to tackle poverty in other parts of the world.

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34 Comments

  1. Tad Davison
    Posted May 8, 2014 at 10:23 pm | Permalink

    Perhaps we need to look at loans to African nations by the west, that they couldn’t hope to repay. They then default, and the corporations muscle in and take their national resources. Now where have we heard that one recently?

    Africa could be thriving and self-sufficient. It could easily feed its own people and provide a decent standard of living. Instead, it is kept in a permanent state of indebtedness and poverty. Little wonder many African nations are now turning to China for their salvation. The corrupt and morally vacuous western powers have done Africa no favours whatsoever. If the African people had a good standard of living, they could afford to buy our goods and services in a free and unfettered way, which would help our own economy. Still, a few trillion shared narrowly amongst a powerful elite is much more preferable to putting food in kids bellied that have absolutely nothing at all.

    Tad Davison

    Cambridge

    • lojolondon
      Posted May 9, 2014 at 11:46 am | Permalink

      Africa needs to be able to export – not just the minerals we need so allow them to, but importantly, the food they can grow. The EU CAP is directly responsible for the continued empoverishment of Africa and Africans, and steady increase in food costs by banning African imports across the board to protect European (French) farmers from competition.

      • Tad Davison
        Posted May 9, 2014 at 3:09 pm | Permalink

        Well said! But strangely, we never hear the pro-EU types like Cameron, Clegg, Miliband, The BBC, and Channel 4 News discuss such things. All they ever want to do is knock UKIP for their own dubious purposes. The sooner the EU collapses, the better it will be for a whole lot of people both inside and outside its sphere of tainted influence.

        Tad

      • uanime5
        Posted May 9, 2014 at 10:12 pm | Permalink

        Even without CAP African farmers would have problems selling food in the EU because they’d have trouble proving it was was grown according to EU laws (such as hygienically and not using slave labour).

        • Edward2
          Posted May 10, 2014 at 8:52 am | Permalink

          Indeed, the determination to avoid free trade is supported not just by CAP but by the application of many thousands of complex rules and regulations Uni, designed to make entry almost impossible.
          In a decent society we would be actively helping them to be compliant so we could trade with them.
          Sad that you have no sympathy for those in poorer nations trying to improve their lives.

        • Tad Davison
          Posted May 10, 2014 at 10:11 am | Permalink

          OK, so what do you propose? How can we improve the lot of African farmers and give them a fighting chance to improve their lot in life by selling goods to the EU?

  2. Lindsay McDougall
    Posted May 9, 2014 at 1:24 am | Permalink

    Just to ram home the point, Nigeria is richer than most African countries but 80% of Government revenues come from petroleum exports (crude oil).

    Nigerian oil is mostly refined overseas and re-imported as refined petroleum. Distribution is by pipeline and by road, and theft is rife. Tank farms used to store refined petroleum are operating at only 20% of capacity. Petroleum is not transported by rail, even over long distances to the northern interior, because the railway has become dilapidated; only now is a railway rehabilitation programme nearing completion.

    • margaret brandreth-j
      Posted May 9, 2014 at 1:33 pm | Permalink

      now how can we help them?

  3. JA
    Posted May 9, 2014 at 1:35 am | Permalink

    London supports 60 to 70 million people (population depending on whom you believe)

    Is this what we’ve come down to ? Comparing ourselves to Nigeria for feelgood ?

    Now don’t get me wrong. I feel very lucky to have been born here and know full well what a hard world this is having seen much of it for myself. Others here will have fought dusty foreign campaigns in the Queen’s uniform, some will have worked in these places in industrial and charitable capacities.

    A UK politician’s job is in no way meant to be about tackling ‘global’ poverty – nor (no matter how tragic) deploying troops to rescue non British kidnap victims in backward countries.

  4. Denis Cooper
    Posted May 9, 2014 at 1:48 am | Permalink

    Off-topic, JR, I noticed that Nigel Farage dropped your name near the end of Question Time last night, citing your question to Vince Cable and his reply as evidence that the final decision on the Pfizer bid for AstraZeneca would not be taken by the shareholders or by UK ministers or by the Commons but by the European Commission.

    Not that everybody would have been able to hear him say that; he had remained silent while the four others on the panel said their pieces and argued among themselves, but when it came to his turn none of those four were prepared to afford him the same courtesy and instead they all started trying to shout him down, and the chairman did nothing about that.

    In the end Nigel Farage directly accused Chuka Ummuna of either deliberately lying or being “pig ignorant”, so I hope that your account on that issue was accurate!

    I think we can see from this what would happen if there was a pre-election TV debate involving Farage and Cameron, Miliband, Clegg and some woman from the Greens who is only known to other Greens: it would be four people constantly interrupting the fifth and trying to shout him down, with the chairman neither stopping them nor allowing him to rebut anything they said when they were speaking out of turn.

    Reply Of course what I said was accurate and confirmed by Dr Cable. More proof that it is Conservatives in the Commons who highlight the truth on these matters!

    • alan jutson,
      Posted May 9, 2014 at 6:14 am | Permalink

      Dennis

      Yes I too viewed the end of question time.

      The others do not like him at all do they, probably because he actually answers a question with simple words, like it or not.

      • Brian Tomkinson
        Posted May 9, 2014 at 7:56 am | Permalink

        Alan,
        Quite right; each time you hear Farage he answers the questions directly whilst politicians from other parties dissemble frantically and such is their contempt for democracy they try to drown him out.

        • Anonymous
          Posted May 9, 2014 at 9:17 am | Permalink

          The frantic dissembling is obvious to onlookers. Shouting the man down does not work.

          Like Farage or not – we want to hear what he has to say and anyone who shouts him down seems petulant.

    • Brian Tomkinson
      Posted May 9, 2014 at 7:50 am | Permalink

      Reply to reply,
      JR: “it is Conservatives in the Commons who highlight the truth on these matters!”
      Such a pity that your party Chairman outside the Commons was one of the rabble that tried to shout down Farage last night unhindered by Dimbleby. Democratic politicians who cannot bear the views of an opponent and choose to deny them the chance to be heard.

      • Tad Davison
        Posted May 9, 2014 at 10:52 am | Permalink

        You’re exactly right Brian, I believe there is a pro-EU agenda, and it just makes me all the more determined to support UKIP.

        Tad

    • Bob
      Posted May 9, 2014 at 7:59 am | Permalink


      Reply Of course what I said was accurate and confirmed by Dr Cable. More proof that it is Conservatives in the Commons who highlight the truth on these matters!

      So why didn’t Grant Schnapps expose Chukka’s ignorance then? He left it to Nigel Farage, the only person on the panel to tell it like it is.

      The LibLabCon are “all in it together”

      • Anonymous
        Posted May 9, 2014 at 9:18 am | Permalink

        “They’re all in it together” perhaps.

    • stred
      Posted May 9, 2014 at 8:32 am | Permalink

      As you said,Dimbleby made no attempt to control the interruptions. He watched while grinning. Blatant bias was just par for the course , as BBC think is that UKIP is not a serious party and the shouting down is good for entertainment. Highly unprofessional.

    • Denis Cooper
      Posted May 9, 2014 at 9:15 am | Permalink

      Yes, I have now seen it confirmed in the Guardian:

      http://www.theguardian.com/commentisfree/2014/may/08/pfizer-takeover-astrazeneca-american-asset-strippers

      “The size of the merger means that it is likely to be reviewed by the European commission rather than the UK’s merger authority. The government could intervene in the commission’s review in order to “protect legitimate interests” under article 21(4) of the EU merger regulation. If successful, the effect would be for Britain to examine the impact of the merger on its “legitimate interest” while the commission reviews the impact of the merger on competition. A legitimate interest could be the potential negative impact of the merger on the UK’s research base. I am aware that the secretary of state is already looking at this option, and I think it is worth pursuing vigorously.”

      And in the Irish Times, where a competition lawyer says that this is unlikely to work:

      http://www.irishtimes.com/business/sectors/health-pharma/eu-likely-to-block-uk-intervention-in-astrazeneca-bid-1.1788471

      “(But) I think it’s going to be very hard for the government to intervene. The whole point about the European Commission is that where you have big mergers they should be regulated centrally and individual member states should not be able to intervene except on exceptional grounds.”

    • Lindsay McDougall
      Posted May 9, 2014 at 10:11 am | Permalink

      The only TV debate between leaders that is needed in the immediate future is between Messrs Cameron and Farage. That will enable Mr Cameron to crystalise his negotiating position:

      Does he want Treaty change just for the UK, or a two ring Europe, or a totally reformed EU?

      Why, since the Euro has been a disaster, does he want it to ‘succeed’?

      What are his ‘red lines’ in the renegotiation?

      If he doesn’t want the UK to belong to a European Superstate, why will he not repeal our Acts of Accession to the Maastricht, Amsterdam, Nice and Lisbon Treaties?

      Is he happy about the revival of German militarism authorised by the Lisbon Treaty (Don’t you dare deny it. I have looked up a summary of the Lisbon Treaty on the Europa site.)?

      I am sure that Mr Cameron, an honest man, will be most anxious to clarify matters.

    • Tad Davison
      Posted May 9, 2014 at 10:49 am | Permalink

      I saw Question Time Denis, and was immediately taken by something Caroline Lucas said, which told us much about the way these pro-EU people are programmed and brainwashed. They are so ill-informed, they should never hold public office.

      She gave a long list of the things that we, in her opinion, should be grateful to the EU for. What she failed to do, was to give just one law that our own parliament couldn’t have passed were it so minded and free to do so. She seems content, as most of the others parties do, for there to be a massive but expensive and unnecessary bureaucracy that the tax-payer has to find the money for. Just more left-wing twaddle wrapped up in a cloak of outwardly plausible respectability.

      Tad

      • uanime5
        Posted May 9, 2014 at 10:18 pm | Permalink

        What she failed to do, was to give just one law that our own parliament couldn’t have passed were it so minded and free to do so.

        Well the UK’s parliament may have had trouble passing laws to harmonise mobile phone tariffs across Europe.

        Let’s not forget about all the EU laws that the UK government has opposed, such as the Working Time Directive which limited the number of hours an employee (such as a junior doctor) could be forced to work.

        • Tad Davison
          Posted May 10, 2014 at 10:25 am | Permalink

          ‘Let’s not forget about all the EU laws that the UK government has opposed, such as the Working Time Directive which limited the number of hours an employee (such as a junior doctor) could be forced to work.’

          You still don’t get it do you. If our government wanted to introduce laws, it could. If the British people didn’t like those laws, or wanted the government to introduce specific laws that weren’t in the government’s manifesto, then they could change the government at the next election for one that would reflect their wishes. Our laws would be tailored to meet our needs and aspirations. We don’t need the EU at all!

          The worrying thing about you though, is that we’ll still be having this discussion well into the future, even though your argument collapses every time.

    • Lifelogic
      Posted May 9, 2014 at 12:32 pm | Permalink

      My take on Question Time too. Why is this silly green person always on she clearly has so little understanding of the science. Shirley Williams a pleasant old lady but wrong on every major issue like all Libdums. They have this list of loopy lefties from the greens and Billy Bragg, Jo Brand, Russell Brand, Owen Jones …….. then half the Tory party are Ken Clark, Lord Patten type lefties too, the chairman is clearly “BBC think”. Then the audience too seem to be bused in by the Labour’s head office. So it is 6 to 0 and 6 to 1 at best.

      To reply:- Well some conservative bring out the truth perhaps 100 are sound (the leadership might as well Labour/Libdem for all the difference it would make. They are in all but name anyway).

      Still only a tiny handful of “Tories” voted against the climate change act. Why are they dim, career politicians or just corrupt? I can see no other reason.

      • margaret brandreth-j
        Posted May 9, 2014 at 1:45 pm | Permalink

        To be quite honest it seems to be everyone else who is silly and not you?You rant and generalise and can’t quite accept the science based conclusion that climate change is with us.
        Caroline Lucas I believe is a sensible lady(don’t you agree John) who is fighting for a cause against tyrants who are “pig ignorant” .We may not like the climate change act , but something needs to be done to reduce the effects of warming .

        Reply No I do not think Miss Lucas is sensible. Forcing the UK to use dear energy and pushing industry out of the UK is not a good policy to follow.

  5. Posted May 9, 2014 at 2:58 am | Permalink

    I wouldn’t dismiss the concept of GDP but it needs to be viewed in perspective.

    In London it would be usual for childcare, example, to be paid for as a financial transaction and as such, those payments would contribute to total GDP. That would be quite unusual in an African village where the communal concept is much stronger, and children are looked after as a kind of assumed favour. The payment, if it is considered that way, would be the sharing of a meal or some other non-financial gift which wouldn’t count towards GDP.

    A TV in London would be watched by one person. It would be more like 10 people there. It would be the same for many other activities too like house building, food cultivation, clothes manufacture. That is not to say that African villagers are wealthy by western standards but they do have something that Europeans have long since lost.

  6. Cheshire Girl
    Posted May 9, 2014 at 5:56 am | Permalink

    I believe we are still giving financial aid to Nigeria. I dont think we should be in the business of educating children who live in other countries. That should be the function of their governments. Forgive me if i am wrong but our government seems far more interested in looking good abroad than they are in what is happening in the UK, and if we protest we are lectured on how we should be ‘proud’ of what we are doing.

    With regard to Question Time last night. I groaned when I saw it was entirely composed of politicians. The result was predictable. It was chaos! Lots of interupting by them all. The Labour and the Conservative representatives could’t wait to shout down Ukip, so desperate are they to get into and retain power. I noticed also that when a member of the audience from Southampton asked where all the immigrants allowed into the UK were supposed to be housed, that question was never answered by the panel, but we got the usual remarks about the NHS and how we should be proud of our ‘diversity’ . The problem of numbers is just never addressed! As a lifelong member of the Conservative party, it made me want to vote UKIP !

    • Lifelogic
      Posted May 9, 2014 at 12:35 pm | Permalink

      Indeed the very occasional episodes without politicians are far more interesting. Politicians are so very often just like a stuck record – you know the silly drivel they will come out with as soon as the question is asked.

  7. Lifelogic
    Posted May 9, 2014 at 6:28 am | Permalink

    No reason why the UK could not have grown at 6% PA too (instead of less than 0% for the past few years) had we had sensible small government policies, cheap energy, got rid of daft employment laws, free up planning, go out of the EU and fired half of the state sector, get fracking – but Cameron, Clegg, Davey and Cable do not want growth at all it seems.

  8. Narrow Shoulders
    Posted May 9, 2014 at 6:53 am | Permalink

    I haved lived among the poor in a developing economy for a reasonable period. The villagers were the happiest and most satisfied people I have ever met. When that economy started to grow and credit became available to all the clamour for stuff overrode all else and the populace became as miserable as most London commuters. After a while the dissatisfaction became such that I returned to the London commute myself from where my government pleads with banks to give me credit and over taxes me.

    • Bob
      Posted May 9, 2014 at 8:05 am | Permalink

      @ Narrow Shoulders
      Your comment reminded me of the film “The Gods Must Be Crazy”, where an empty cola bottle brings strife and conflict to a previously content tribe of bushmen.

  9. ian wragg
    Posted May 9, 2014 at 11:01 am | Permalink

    I worked in Africa during the 70’s and we were giving aid then. One of the good things Maggie did was to use the aid money to pay the outstanding bills for the mining companies (state owned) and pay outstanding salaries to the expat employees. The rulers were up in arms about this because in Zambia Kaunda wanted to spend the money on Russian military hardware.
    Today we continue to give aid and the lot of the population has barely changed. Before independence, most African countries grew things and exported cash crops becoming self financing. Today they rely on Western aid and China buys up a the facilities.
    Our Grandchildren will be paying for this stupidity.

  10. Martyn G
    Posted May 9, 2014 at 11:17 am | Permalink

    I have lived and worked in East Africa and long ago concluded that so very many of its woes and poverty are caused by rampant tribalism, nepotism and corruption. Until those issues are addressed and corrected nothing much will change for the better, with or without the UK throwing shedloads of money at the problems there.
    Come to think of it, UK politics these days are not so unlike some of those of Africa, but here all based on schools, chums and toeing the party line; if that is not tribal, then what does one call it?

  11. David Price
    Posted May 10, 2014 at 6:15 am | Permalink

    Not an economist but I’ve always been troubled by the use of GDP which includes government expenditure while ignoring how much of that is based on borrowing.

    GVA looks more interesting to my untrained eye as it considers value added as part of product or service provision rather than simply funds movement.

    According to Knoema [1], Nigeria GVA is about 5% of UK GVA 2012/13

    According to ONS 2012 data [2] UK GVA was £1,383 bn. Of that London accounts for 22% the South East 14.6%, England 84%, Scotland 7.7%, Wales 3.4% and NI 2.1% (For Denis the extra-regio is 1.7% and unlike all the other regional data where GVA had grown, extra-regio had fallen from the previous year by 10.7%).

    So, on the basis of the ONS GVA assessment;
    – Nigeria has a higher GVA than Wales, NI and extra-regio but lower than all other UK regions,
    – London only contributes 22% of UK GVA
    – England dominates at 84% with the SE region (including London) accounting for 37%
    – London does not carry the rest of the country in terms of value added in the economy, the other regions outside the SE contribute variously with the North West the most at 9.4%

    To focus solely on London is a mistake, it is not the bulk of the value adding activity in the economy. If the measure is oil output then Nigeria beats the UK (extra-regio) hands down. My preference would be to compare the UK with our competitors and the OECD TiVO data for May 2013 [3] shows us 5th behind US, China, Germany and Japan

    [1] http://knoema.com/WBWDIGDF2013Oct/world-development-indicators-wdi-october-2013?tsId=2821580

    [2] http://www.ons.gov.uk/ons/rel/regional-accounts/regional-gross-value-added–income-approach-/december-2013/stb-regional-gva-2012.html#tab-Summary

    [3] http://stats.oecd.org/Index.aspx?DataSetCode=TIVA_OECD_WTO

  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
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