As a young boy, I grew up being told that Nigeria was the giant of Africa. We took Social Studies classes, where we were informed about the economic stature of Nigeria. I never really grasped this until I began to look at the country.
Even today it can be quite a difficult concept to grasp, if you look at the Western reportage of the issues in the country. However, if you look at the numbers presented by independent sources, you can see why.
Currently, Nigeria is Africa’s largest economy with an estimated rebased GDP of $510bn. According to McKinsey, if the country’s potential is optimised, it could become a top-20 economy by 2030, with a GDP of more than $1.6tr. By population size alone, it is Africa’s most populous nation and has been so for a long time.
The UN estimated population of Nigeria, exit 2017, is 192m, making the country the seventh-most populous in the world.
With the current birth rate, an average of four per household, it is estimated that Nigeria will have a population of 273m by 2030, which is almost the current population of the US.
By 2050, the country’s population will outstrip that of the estimated population of the US, and will account for approximately 25% of the population of the continent of Africa.
The way I like to describe the population of Nigeria is this. It is simply a country with the population of Russia squeezed into a land mass twice that of California and four times that of the UK, and with a birth rate that adds the population of Romania into the country every year. Simple, isn’t it?
And there are more numbers worth considering.
Though it has an under-development profile that mirrors much of the continent, with more than 40% living below the poverty line, Nigeria has one of the fastest-growing consumer segments on the continent.
McKinsey estimates that Nigeria’s consumer market is presently worth nearly $400bn a year, with the potential to reach $1.4tr a year by 2030.
A lot of reportage tends to give the impression that the country is largely dependent on oil, and therefore under the curse of the black gold.
However, the recent rebasing exercise revealed that the country is well diversified compared with other oil-producing countries, from having the largest body of fresh water fish in Ondo State, to the huge potential to be the largest exporter of palm oil in the world.
In fact, it has a diversification profile that is similar to that of Russia (Nigeria’s resources share of GDP by 2013 was 14%, while Russia’s was 11%), with GDP growth driven largely by agriculture and services.
The country’s significant dependence on oil revenues is mainly due to a history of bad leadership, corruption and public sector mismanagement, which again is a good reflection of most countries on the continent.
There is another number that is very striking about Nigeria. That number is 70%, which is the population of Nigerians below the age of 35 years.
This is an incredible number, as Africa is the youngest continent on the planet by demography. In fact, the top 20 countries that have the highest population under 15 (accounting for an average of 50%), are all African countries, with Nigeria being number 15 on the list.
This is too powerful a metric to ignore. The youth of Africa are not only its future, but are also globally the most significant consumer base of the future.
The World Economic Forum projects that by 2050, Africa will have the largest population in the world. In other words, out of a projected total population of 9.725bn people on the planet, Africa will account for 5.267bn, equating to 54% of the total global population.
And over 30% of that African population will be between the ages of 10 and 24. In the same vein, the population aged 65 and older in Africa will only have grown from 3% to 6% by 2050. Sadly, I will have joined this limited edition of the population by then!
This means that the largest consumer market potential for the next three to five decades lies within Africa.
With the fastest adoption rate of technology and the internet on the continent, literally with under-developed countries leapfrogging the technology adoption curve, the future of the world will happen in Africa.
And Nigeria will play a key role in that, with an estimated 20% to 25% of that young African population in the country by 2050. This is critical, as most economists consider a young population as a great economic gift for countries, especially when they know how to leverage them well.
What a continent!
Any business, local or global, that has a long-term horizon, must have an Africa strategy included in that horizon. Failure to do so is a decision to limit the business’s global competitiveness in the next two to three decades.