Nigeria’s GDP Projected to Hit $6.4trn by 2050- PWC Report

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The Nigeria’s Gross Domestic Product (GDP) has
been projected to rise to $6.4trillion by 2050,
thereby moving the country to the ninth position
on the world ranking, surpassing Germany, United
Kingdom, France, and Saudi Arabia.
This was stated in a report by
PricewaterhouseCoopers, titled: “Nigeria: Looking
Beyond Oil”.

Nigeria’s rebased figures had put the value of the
nominal GDP in 2012 at N71.1 trillion (about
$453.9 billion) as well as a projected figure of
about N80.2 trillion (about $509.9 billion) in
2013.
However, in order to achieve the 2050 GDP
projection in the report, PwC stressed the need for
diversification of the country’s economic
overdependence on crude oil. It pointed out that
Nigeria’s intrinsic potential lies beyond oil,
maintaining that harnessing this potential had
become an imperative given the expectations of
lower for longer oil prices and heightened
competition in the oil market.
Based on recent trends, the report reviewed the
impact of low oil prices on key economic
indicators and the real sector as well as
addresses the question of priority sectors that
should be targeted for diversification efforts.
The PwC report identified agriculture, petroleum,
retail and ICT as priority sectors with the most
dominant transmission links to the overall
economy.
It also noted that forward linkages to agro-
processing and other services such as logistics
as well as backward integration to input supply
sectors could improve farm incomes, increase
employment and improve domestic food security.
Potentially, Nigeria’s global agriculture exports
could take-off at a rate similar to Brazil’s, with
$59 billion in export revenues by 2030, it added.
Similarly, value added to oil and gas output needs
to urgently improve by implementing
diversification within the sector. This implies
investments across the downstream sector to
develop petrochemicals, fertilizers, methanol and
refining, industries relevant in both industrial and
consumer products which Nigeria currently
imports.
Commenting on the findings of the report, the
Country and Regional Senior Partner for PwC
Nigeria and the West Market Area, Uyi Akpata
noted: “Consumer spending is the largest driver of
the economy, accounting for about 70 per cent of
GDP and this is expected to be the boost for the
retail sector growth even as population continues
to expand.
“Thus, as incomes rise along with rapid
urbanisation, it is projected that household
consumption expenditure could reach $1.1 trillion
by 2030, from $317 billion in 2014. With tele-
density at 107.87, a large population of urban,
young people and massive scope to improve
internet broadband penetration, Nigeria is likely to
see accelerated growth of its digital economy.
More importantly, the opportunity to leverage
technology to generate improved social and
economic outcomes across other sectors has to
be created.”
In detailing what needs to be done to support the
projected economic growth, a PwC Partner and
Chief Economist, Andrew Nevin, opined that the
transition to a non-oil economy would not be an
easy task.
Furthermore, PwC’s Partner and Head of Tax &
Regulatory Services, Taiwo Oyedele noted that a
well-structured tax system was important in the
diversification of the economy. According to
Oyedele, Nigeria needs to ensure sustainable
fiscal management that is resilient to the global
oil price cycles.
“Improving tax collection and administration have
become imperatives for achieving national growth
objectives. The framework for tax exemptions
should be reviewed and approvals targeted at
growth inducing sectors even as the government
improves collection.
“Efficiency in government spending has to
improve; there is room for substantial savings in
capital outlays and operating expenditure across
the three tiers of government,” he added.
The report was launched at a forum jointly
organised by the Lagos Chamber of Commerce
and Industry (LCCI).
In an address earlier, the LCCI President, Mrs.
Nike Akande, said the sustained decline in global
oil prices since 2014 has put the nation in a
difficult position and consequently led to various
fiscal and economic challenges such as the drop
in foreign earnings, decline in foreign reserves,
huge financial bailout for some state governments
and unstable business environment.
According to her, the decline in crude oil price will
change the country’s development focus for good
if the right steps are taken to reduce reliance on
oil.
“I believe that a holistic diversification of the
economy is desirable and inevitable at this trying
period. There are many alternatives to oil and
there are a lot we can do to make the best out of
the present situation.
“More than ever before as a nation, we need more
strategic decisions and policies that will put the
economy into the path of economic recovery and
social prosperity,” she added.

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