Former Chairman of Goldman Sachs Jim O’Neill has again predicted that Nigeria economy may grow by 10 per cent if the privatized power sector ends daily electricity cuts. It will be recalled that it was Goldman Sachs that in 2004 projected that Nigeria will become one of the twenty largest economies in the world by 2025, which gave birth to Nigeria’s vision 20 20 20
Jim O’Neil said “Nigeria’s economy “could easily” grow at a rate of 10 per cent if the newly privatized power industry puts an end to daily electricity cuts. Nigeria’s population of more than 160 million people, the biggest in Africa, is key to unlocking “enormous” growth potential, O’Neill, now a Bloomberg View columnist, said yesterday in an interview in Lagos.
Nigeria is ranked alongside Mexico, Indonesia and black as part of his MINT countries with the largest emerging-market populations outside Brazil Russia India. O’Neill coined the acronym for that grouping, BRICs, while at Goldman.
Nigerian President Goodluck Jonathan in September handed over control of 14 state-owned power companies to new owners including Siemens AG, Korea Electric Power Corp. and Transnational Corp., starting a market-driven electricity industry in the country. “If industry and business deliver on this new power agreement, that’s going to propel growth to so much stronger levels,” O’Neill said. “Nigeria is all about the medium- to long-term in my opinion.” Nigeria’s economic growth accelerated 6.81 percent on an annual basis in the third quarter, compared with 6.18 percent in the second quarter as the pace of its oil industry’s contraction eased and farm output rose, the National Bureau of Statistics said. “Nigeria has to be careful about not thinking its success the past decade is about its own brilliance,” O’Neill said. “It might be just because we have these huge rising commodity prices.”
The ruling People’s Democratic Party, which has won all elections held since Nigeria ended military rule in 1999, faces its sternest challenge before an election in 2015. The nation’s four main opposition parties merged this year in order to take on Jonathan, who hasn’t publicly stated if he will run, while some senior PDP figures quit the party to form The West African nation needs expansion of 9 percent to 10 percent to reduce poverty, Finance Minister Ngozi Okonjo-Iweala said in a video presentation at a conference in Lagos. The World Bank indicator 68 percent of Nigerians live on less than $1.25 a day. “Our growth has come with inequality,” she said. “It’s not inclusive Africa’s top oil producer intends to offer international debt regularly to develop a benchmark for borrowers after selling $1 billion of Eurobonds in July, Okonjo-Iweala said in an October interview.
The country plans to raise $100 million in the first quarter of next year by selling so-called diaspora bonds targeted at citizens living overseas, she said.
Yields on the nation’s 10-year dollar denominated notes due July 2023 declined 68 basis points, or 0.68 percentage point, to 5.9 percent since their issue. Speculation about when the Federal Reserve may start tapering $85 billion in monthly asset purchases eased demand for emerging-market debt.
“My hunch is that anything Nigerian at the moment is in hot demand as it is very much in sub-Saharan Africa, so long as the Fed background isn’t too negative,” O’Neill said. “So long as people think out of the election comes a stronger Nigeria, I think demand O’Neill said he would not put money into Nigeria’s energy industry. The country is Africa’s biggest oil producer, pumping about 2 million barrels a day.
“The world commodities cycle has peaked particularly for oil and energy, so I wouldn’t want to be investing in those things for the next few years,” he said.“Nigeria’s future shouldn’t be about its commodities and its energy, at least in terms of the raw crude. Turning that into manufacturing products is probably what Nigeria’s future is about.”
