POWER PROJECTS SHOULD RAISE ECONOMIC GROWTH TO 10% - JIM O'NEILL

Nigeria’s economy “could easily” grow at a rate of 10 per cent if the newly privatised power industry puts an end to daily electricity cuts, a former Chairman of Goldman Sachs Asset Management, Jim O’Neill, has said.

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 in Lagos, according to Bloomberg on Tuesday.

Nigeria is ranked alongside Mexico, Indonesia and Turkey as part of his MINT countries with the largest emerging-market populations outside Brazil, Russia, India and China. O’Neill coined the acronym for that grouping, BRICs, while at Goldman.

President Goodluck Jonathan recently handed over the control of 14 state-owned power companies to new owners including Siemens AG, Korea Electric Power Corporation and Transnational Corporation, starting a market-driven electricity industry in the West African nation. Blackouts are a daily occurrence in Nigeria, the continent’s biggest economy after South Africa.

“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 per cent on an annual basis in the third quarter, compared with 6.18 per cent in the second quarter as the pace of its oil industry’s contraction eased and farm output rose, the National Bureau of Statistics said on Tuesday.

“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 Peoples 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 their own group.

The West African nation needs expansion of nine per cent to 10 per cent to reduce poverty, Finance Minister, Ngozi Okonjo-Iweala, said in a video presentation at a conference in Lagos on Tuesday.

The World Bank estimates 68 per cent of Nigerians live on less than $1.25 a day. “Our growth has come with inequality,” she said. “It’s not inclusive enough.”