With Nigeria and South Africa having the two largest economies in Africa with nearly 300 million people and facing economic problems requiring tough reforms, the Financial Times says Nigeria, with President Bola Tinubu at the helm, has the better chance for growth and economic recovery.
According to the FT, for all its wrenching problems, Nigeria had more quick fixes, and however deep the ethnic and religious gulfs bequeathed by colonialism, they were easier to heal than the racial faultlines cemented by apartheid.
“Bola Tinubu, the new president appears to understand this”, the FT noted.
“With one utterance he removed the ruinously expensive petrol subsidy, with another distortionary foreign exchange regime. Both had allowed middlemen and crooks to make money while depriving productive parts of the economy of cash.
“These policies are not magic. But they can help restore investor confidence. Nigeria now needs a competent cabinet, a coherent security policy, better tax collection and more spending on doctors and schools”, the FT stated.
That task looks harder in South Africa, as President Cyril Ramaphosa has found, the FT said. After nearly 30 years in power, the ruling African National Congress has lost both ideas and moral authority.
South Africa starts off with a more sophisticated economy, better universities and deeper pension funds. Despite Zuma’s efforts, it also has stronger institutions, some of which held the line during the era of state capture.
With an average income of $6,800 its economy produces only marginally less output than Nigeria with a quarter of its people.
But averages are misleading. South Africa’s income distribution is the most unequal in the world. It has a Gini coefficient of 0.63, in which 0 means a perfect distribution of wealth and 1 means one person owns everything. Nigeria, has a Gini coefficient of 0.35.
Dele Olojede, a Nigerian author living in South Africa, says: “South Africa’s wealth is in white hands and political power is in black hands. It is inherently unstable because of that.”
