Lessons for Nigeria as India adds 31 billionaires in one year

India, which overtook China as the world’s most populous country last year, added 31 new billionaires within a year.

This situation offers lessons for Nigeria, Africa’s most populated nation, which saw the number of billionaires in the country increase by one to four on the latest Forbes 2024 World’s Billionaire list.

According to Forbes, India set another record on its billionaires list with 200 names and Asia’s very first centibillionaire.

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“The Indian stock market is on fire in the run-up to the upcoming federal election, which is widely expected to result in a third term for Prime Minister Narendra Modi. The rally produced a record crop of 200 Indians on Forbes’ 2024 list of the World’s Billionaires—up from 169 last year,” Forbes said in a report.

It said their combined wealth is approaching a trillion dollars, with a record total of $954 billion, up 41 percent from $675 billion last year and well exceeding 2022’s total of $750 billion.

The American business magazine revealed that among the new billionaires are Naresh Trehan, a leading cardiac surgeon-turned-healthcare entrepreneur, who owns and runs the Medanta chain of hospitals in north India.

“Ramesh Kunhikannan, founder of Kaynes Technology, which supplied electronic systems for India’s moon mission in August that powered the rover and the lander; and Renuka Jagtiani, who oversees Middle East retailing giant Landmark Group.”

Others are Keshub Mahindra, chairman emeritus of Mahindra & Mahindra, and paints billionaire Ashwin Dani of Asian Paints.

Data from the World Bank shows the wealth of India jumped more than fivefold in 20 years. The country’s GDP per capita rose by 414.1 percent to $2,411 in 2022 from $469 in 2002. This compares with Nigeria, which grew by 195 percent from $733.

The increase in wealth has made India one of the world’s fastest-growing economies, lifting about 415 million people out of poverty between 2005 and 2021.

India, which is also a developing country like Nigeria, is expected to become a $30-trillion economy in the next 26 years with a per capita income of $21,000.

The Indian economy is currently the world’s fifth largest, with a size of $3.75 trillion, and is expected to become the third largest in the next four years.

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“If this kind of pace continues for some years, it will make India a $30-trillion economy by 2045-50 with per capita income of $21,000 pushed by robust consumption and exports,” Atanu Chakraborty, chairperson of HDFC Bank, India’s largest lender by market capitalisation, said last October.

Apart from wealth, India has witnessed a foreign direct investment (FDI) surge to $49.4 billion in 2022 from $3.59 billion in 2000, while Nigeria’s FDI turned negative (-$187 million) from N1.31 billion 22 years ago, according to United Nations Conference on Trade and Development.

India ranked 40th on the 2023 Global Competitiveness Index 2023. The country also jumped by six places to 38th in the World Bank’s 2023 Logistics Performance. In terms of innovation, it ranks 40th.

Here are six lessons Nigeria can learn from India’s wealth growth:

World’s second-lowest manufacturing costs

Last year, a Boston Consulting Group (BCG) report ranked India second among countries with the lowest manufacturing costs.

It said as many global companies reconfigure their manufacturing and sourcing strategies due to geopolitical uncertainty, India is emerging as a future export manufacturing powerhouse.

“For the past two decades, we have heard talk of India’s potential in manufacturing, often with a lingering question mark. Now, it seems that many of the pieces of the puzzle are falling into place,” the report added.

It found that exports from India to the United States increased by $23 billion — a 44 percent rise from 2018 to 2022.

Mukesh Ambani, chairman and managing director of Reliance Industries, is the richest man in India. His businesses include energy, petrochemicals, natural gas, retail, entertainment, telecommunications, mass media, and textiles.

Developing countries like India built their industries behind protectionist walls, which restricted imports, then thrived when trade with the rest of the world was encouraged, according to a recent report by The Economist.

In 2015, India announced plans to increase the industry’s share of the Indian GDP to 25 percent, from 16 percent. “Sell anywhere, but make it in India,” Narendra Modi, India’s prime minister, said.

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Favourable business policies and reforms

The government of India aims to achieve a GDP of $5 trillion by 2025.

To make this growth possible and to improve its business environment, the government introduced measures such as easing restrictions on FDI, streamlining the tax code, and establishing an organisation specifically charged with facilitating foreign investments.

It has also implemented reforms like the Goods and Services Tax, the bankruptcy code, and the liberalisation of foreign investment. Others are creating a common market, opening new sectors, privatisation and infrastructure development.

India’s startup programme is another policy that offers incentives and tax benefits to startups.

Government’s regulation of FDI

Forbes India said FDI in India is subject to regulation and oversight by various government bodies, such as the Department for Promotion of Industry and Internal Trade, which formulates and implements policies to promote and regulate foreign investment in India across sectors.

It said the Reserve Bank of India manages the monetary aspects of foreign investments in India. The Securities and Exchange Board of India regulates FDI in the capital market.

Stable economic growth

India’s population grew by 7.2 percent to over 1.3 billion in 2022. It is one of the world’s fastest-growing economies, lifting about 415 million people out of poverty between 2005 and 2021.

Shri Narendra Modi, prime minister of India in May 2020, announced a special economic and comprehensive package of more than $270 billion – equivalent to 10 percent of India’s GDP, under the Atmanirbhar Bharat Abhiyan (Self-reliant India Campaign).

Large pool of tech, science and technical talent

India has the third-largest group of scientists and technicians in the world, according to All India Management Association and BCG.

This has increased the involvement of tech giants such as Apple, Google and Samsung in the country’s manufacturing landscape. Samsung has established the world’s largest mobile phone manufacturing facility, Apple has been assembling iPhones, and Google plans to manufacture its flagship Pixel 8 smartphone in India.

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Large youth population

India has its largest-ever adolescent and youth population, according to the United Nations Population Fund. The Fund projects that it will continue to have one of the youngest populations in the world till 2030.

This demographic dividend is an incentive for investors. By 2030, it is estimated that around 42 percent of India’s population will be urbanised from 31 percent in 2011.