South Africa woke up on Monday morning not having felt the seismic shift that had transformed the continent, at least economically, over the weekend. We were number one – the biggest economy on the continent by far – at the end of last week. But by Sunday, when the Nigerian National Bureau of Statistics announced its new calculation of the size of Nigeria's gross domestic product (GDP), we had moved well and truly to being number two.
The slumbering African giant is awakening. In Nigeria's case, the slumber has been so soporific that until now it had not rebased its GDP calculations since 1990. The new calculations include the contribution of financial services, telecommunications and media for the first time, boosting GDP by 90% – to $509-billion. At $380-billion, South Africa begins to look like an also-ran.
The smartest South African money is putting a positive spin on this. The treasury and business leaders have pointed out that African growth is good for South Africa – as is investing in this growth. Our market of 50-million or so domestic consumers is by itself too small to develop significant manufacturing capacity, so the larger African market is an attractive proposition for local business.
Nigeria's GDP – the sum of the goods and services it produces in a year – should indeed be larger than ours, many have pointed out, simply because its population is more than three times larger than South Africa's.
There have been numerous other comparisons: our GDP per capita is much higher at about $7 000 versus $3 000; Nigeria's tax base, at just 12% of GDP, versus South Africa's 26%, is too low to operate a developmental state; and the cost of borrowing for its government for 10-year money is a whopping 14% compared with our relatively modest 8%.
We have 10 times the installed electricity infrastructure per capita than Nigeria. It is only beginning to industrialise, senior people in the South African government have pointed out, and, for all its progress, Nigeria is not where you would set up the headquarters of your African operations. For such operations, South Africa remains the destination of choice.
Unemployment, especially among young people, is too high in both cases and, although South Africa may be ahead of Nigeria on some metrics, our life-expectancy and infant-mortality figures are a source of continuing shame – these are numbers we wouldn't want to compare with those of any other country.
Inequality is a challenge for both South Africa and Nigeria. As we report in the Business section of this issue, the earnings of the country's wealthiest executives are stratospheric compared with those who rely on child-support grants to survive. Nigeria grows at 7% a year; South Africa at less than 3%. As a relatively developed economy it is much harder for South Africa to achieve high rates of growth. But the rest of Africa is waking while South Africa sleeps.
If some of the leaders in the ruling party put as much effort into reforming our somnambulant ways and demonstrating much-needed leadership as they put into dissing Thuli Madonsela and protecting Number One, we'd all feel that we were doing more to benefit from the African growth story.