Nigeria's economy will soon overtake South Africa's: Africa’s big shots | The Economist

The Economist reports that a revision in Nigeria's statistics could well mean an increase of 60% in GDP

Nigeria is about to deliver another blow to South African pride. Its
statistics office will soon publish long-delayed revisions to its
estimate of the size of the economy. As the score stands now, Nigeria is
second to South Africa as the continent’s economic big shot. Its GDP at
current prices was $292 billion last year, according to the IMF,
compared with $354 billion for South Africa’s. But that will change.
Bigwigs in Abuja, Nigeria’s capital, have dropped heavy hints that
revised figures will put Nigeria comfortably into first place. Charlie
Robertson, chief economist of Renaissance Capital, said that Nigeria’s
GDP figure could be revised up by as much as 60%.
Why such a big
upgrade? An economy’s growth rate in inflation-adjusted terms is
typically measured by reference to prices in a base year. In Nigeria the
reference year is 1990; real GDP for subsequent years is expressed as
if prices had remained constant since then. To tot up an estimate of GDP
growth, its number-crunchers add together growth estimates from each
sector of the economy, ie, farming, manufacturing, construction and
services. The weight they give to each part depends on its importance to
the economy in the base year.
But as time passes those weights
become less relevant. A snapshot of the economy in 1990 gives little or
no weight to mobile telephony or other new and fast-growing industries.

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