Africa's Economic Boom [prediction African vision 2030]

Deogratius Kilawe

C.E.O - Mikono Speakers Worldwide

On June 16^th I was at Julius Nyerere International Airport getting ready to board a flight to Nairobi for the Kenya edition of the High Performance Leadership seminar with Azim Jamal and Brian Tracy. While at the airport, I was pleasantly surprised to meet my university professor from my undergraduate days at Mzumbe University who was boarding the same flight. We sat down over a cup of coffee and he praised me for my work and acknowledged that the university is very proud to have produced such a person as me. Just to hear him speak so highly of me really motivated me to continue what I am doing and keep pushing for change in the world.

The main topic of discuss with the Professor  was the current rebasing of Gross Domestic Product (GDP) of some African countries, most prominent being Nigeria, and similar initiatives in Kenya and South Africa.The United Nations defines rebasing as the "process of replacing present price structure (base year) to compile volume measures of GDP with a new or more recent base year." Rebasing is theoretically a means of allowing the computation of more accurate GDP figures and thus provide a more realistic picture of the economic landscape in a country. After rebasing, Nigeria has now overtaken South Africa as the continent's biggest economy with GDP now worth $510bn (2013 figures).

So what has Nigeria done during its rebasing exercise? The rebased GDP figures now include the informal sector and show a much greater contribution of services sector. E-commerce, telecommunications and its prolific "Nollywood" film industry  are now some of the most important sectors in the Nigerian economy. Nollywood generates nearly $600 million a year and employs more than a million people, making it the country's second-largest employer after agriculture. The number of industries covered in GDP computation has increased from 33 to 46 while greater weighting has been allocated to sectors such as telecommunications.Nigeria and South Africa have the two largest mobile phone markets in Africa[there are now some 120 million mobile-phone subscribers in Nigeria, out of a population of 170 million. Under the new set of data, the oil and gas sector, by far the biggest source of government revenue, contributed 14 percent of GDP compared with 32 percent under the old GDP computations.

Nigeria and South Africa are the largest mobile markets in sub-Saharan Africa, and cell-phone use has been exploding in the country

Why are African countries such as Nigeria rebasing of their GDP now? One reason could be that it is a new marketing strategy. To be named as biggest economy in Africa undoubtedly creates its own hype and can significantly improve an economy's prospects in attracting foreign investment.

"One estimate suggests that for twenty years sub-Saharan African economies have been growing three times faster than suggested by the 'official' data."

When Ghana rebased in 2010, its GDP increased by 60 percent, transforming it instantly from a "low-income" country into a "lower-middle-income" country.

Closer to home in East Africa, currently Kenya is rebasing its economy so as to maintain its position as the biggest economy in East Africa. The rebasing exercise, which shifts the base year from 2001 to 2009, is expected to show an expansion of the economy by 20.6%. economist they urge Nigeria techniques does not reflect reality,

Despite the changes in GDP computation, Nigeria has per capita income of $3,000 which is low – and well below South Africa's at $7,336. Nigerians continue to struggle with poverty, inequality and electricity shortages.

What is the current status in East Africa? Kenya has GDP of $45 billion; Tanzania has $34 billion GDP, Uganda has $23 billion GDP, Rwanda $7 billion GDP and Burundi is $2.4 billion GDP. Due to oil and gas discoveries in Uganda and Tanzania,their respective GDPs are expected to significantly increase in the coming years. In the case of Tanzania, the economy is expected to become the 3^rd biggest economy in Africa by 2035 if key obstacles are going to be resolved.

During my discussion with Professor two issues arose and I would like to share them with you:

• Data might show a country's GDP growing rapidly but the majority of its people are poor. It may be that the GDP is being generated and controlled by very wealthy while rest remain poor and powerless. In a recent interview, Dr Yemi Kale, Statician General of the National Bureau of Statistics of Nigeria said: "While it [GDP] depicts how rich a nation is, this is not necessarily the same as showing how rich the individuals in the nation are, due to the problem of unequal distribution of wealth. Similarly, growth in GDP is not synonymous with job creation.
• If the rest of Africa adopts the same techniques Africa is going to be rich in term of figure not real life.

Nigeria vs South Africa

Nigeria's takes the title of Africa's biggest economy will fuel a longstanding rivalry with South Africa. South Africa currently represents Africa at the G20, as well as in the "BRICS" group of the most powerful emerging economies, which also includes Brazil, Russia, India and China. Nigeria may argue that it should join those clubs too.

Just the other day while I was reviewing a report on the Ease of Doing Business criteria, I discovered that some of the measures to encourage investment and reduce red tape are  very simple. Singapore has been ranked number one due to fact that they have been doing well and scoring good marks in the following areas: Starting A Business, Dealing with Construction Permits, Getting Electricity, Registering Property, Getting Credit, Protecting Investors, Paying Taxes, Trading Across Borders, Enforcing Contracts and Resolving Insolvency.

Back to Tanzania, why has it not been easy to solve the above mention issues quickly? Our nation, like any other nation, is complex machine. However, we can rapidly develop if we succeed in creating and enterprising, business-minded economy. Such an entrepreneurial society will increase efficiency and vastly increase economic growth and development as has been the case in countries such as Singapore, Malaysia and South Korea. As the country develops more rapidly it will also develop politically and exhibit greater democracy and good governance. This will in turn create greater alignment between business and politics as they seek to promote mutual interests, which should mean Tanzanians having an even greater say in their local politics, hence greater development. With all the benefits it can bring, it is imperative to create an enterprising, business-minded society as soon as possible.

I look forward to get feedback from you soon as possible.

Always your fan,

Deogratius Kilawe

C.E.O - Mikono Speakers Worldwide

0717109362

IT PLAZA 1^st Floor

Ohio Street, Dar es Salaam, Tanzania.