Tuesday, April 8, 2014

South Africa Opposition Blames Govt For Being Overtaken As Africa's Biggest Economy

The South African government led by the African National Congress (ANC) is to blame for being overtaken by Nigeria as the largest economy in Africa, the opposition Democratic Alliance (DA) said on Monday.

"The ANC government's failure to achieve South Africa's growth potential over the past two decades has now led to our economy being overtaken as the largest economy in Africa," the DA said.

Nigeria has become Africa's biggest economy after the country "rebased" its gross domestic product (GDP) data.

Nigeria's GDP now includes previously uncounted industries like telecoms, information technology, music, on-line sales, airlines, and film production.

Nigeria's GDP for 2013 totalled 80.3 trillion naira (about 509. 9 billion US dollars), compared with South Africa's 370.3 billion dollars at the end of 2013, according to the Nigerian statistics office on Sunday.

"This technical change means that South Africa loses the label of 'largest economy in Africa' and the prominence of that position in the minds of investors," said Tim Harris, DA Shadow Minister of Finance.

Nigeria's economic growth rate of 6.4 percent significantly outstrips South Africa's growth rate which was registered only 1.9 percent last year.

Unless South Africa dramatically turns around its economic growth it will continue to drop further behind Nigeria and risk being overtaken by other countries in Africa, the DA noted.

"We believe that South Africa has the potential to do much better ?C with decisive leadership, the right policy mix and a government committed to job creating inclusive economic growth, we can again challenge Nigeria for the number one spot," Harris said.

But ANC National Executive Council (NEC) member Naledi Pandor said economists are still studying Nigeria's figures and

therefore people should refrain from making quick conclusions.

"We all should welcome any other African country developing its resources to a level that is signified as improved. Of course, Nigeria has benefitted hugely from a government that has paid attention to improved public institutional management, improved financial administration but also the reality is a major benefit of the recent oil prices. I would remind you that economists are still studying the figures of Nigeria so I wouldn't want us to conclude too quickly," said Pandor.

Earlier on Monday, South Africa's National Treasury welcomed the announcement that Nigeria, Africa's most populous nation, is now the biggest economy in sub-Saharan Africa.

"The announcement resonates with South Africa's consistent message since 1994 that we want to see more African economies grow and live up to their potential, just as we continue striving to do so in with our own economy," the Treasury said in a statement.

"The announcement gives concrete expression to the fact that Africa is indeed rising," it said.

It said South Africa has been and will continue to benefit from faster economic growth in the rest of the continent.

The Treasury said South African firms have played a big role in the growth and development of Nigeria's wholesale and retail and the telecommunications sectors, the two largest components of the services sector.

The South African government and the private sector continue to play no small a part in the growth and development of the continent, said the Treasury.

"This is a positive story of African countries contributing to re-shaping each other's economies through increased investment. South Africa will continue to nurture mutually beneficial trade and investment ties with Nigeria and other African countries," said the Treasury.

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