Chinese slowdown a net negative for Nigeria says O’Neill

The current slowdown in China which can be seen in the fall in its purchasing manager’s index or PMI is a net negative for Nigeria, according to Jim O’Neill an economist and ex-Goldman Sachs banker.

“The slowdown is a net negative for commodity exporters like Nigeria, who would not have the benefit of that higher growth rate from China,” said O’Neill, at the AFC Infrastructure conference held in Lagos on Tuesday.

Economic reforms in China mean that a new China is emerging where policy makers are deliberately slowing down growth, said O’Neill.

“This decade will be different for emerging and BRIC countries that were used to Chinese demand boosting their growth rates,” said O’ Neill.

“Countries like Nigeria would have to figure out how much of a success their economic performance in the last decade has been as a result of their own making or of extrernal factors like China.”

The Chinese economy at $9.2 trillion was equivalent about half of USA’s GDP in 2013.

Seven and a half percent growth by China was equivalent to adding $1 trillion to global GDP per year, according to O’ Neill.

Nigeria may feel the impact of Chinese slowdown mostly from lower oil prices and revenues where it gets up to 65 percent of government revenue and 90 percent of export dollars.

Economic growth in Nigeria which is Africa’s biggest oil producer will accelerate this year from an estimated 6.4 percent in 2013, driven by services, trade and agriculture, the Washington-based International Monetary Fund (IMF) said March 7.

The longer term outlook for Nigeria was still positive, as the country may emerge as the 15^th largest economy in the world by 2050, according to O’Neill.

PATRICK ATUANYA