Nigeria vs Cameroon: Which Country Has the Most Potential?
Nigeria and Cameroon are two neighboring countries on the African continent. Both countries have a substantial population size, with Nigeria having over 180 million inhabitants while Cameroon has just under 23 million inhabitants. However, their economies differ vastly in terms of how developed they are, with Nigeria's GDP per capita at more than $3,000 while Cameroon's is just over $1,000. This article will explore which country holds more potential for economic development: Nigeria or Cameroon?
Section 1: What does the GDP per capita mean?
What does the GDP per capita mean?
According to the World Bank, the GDP per capita is a measure of the average purchasing power of a nation's total production, consumption, and investments. A nation with a higher GDP per capita is said to have greater economic and financial capacity than a nation with a lower GDP per capita. GDP per capita is measured using purchasing power parity (PPP), a statistical measure that takes into account the different prices in different countries in the world. A PPP exchange rate is used for comparison and a dollar is converted to PPP using the PPP exchange rate.
Because both countries are oil-dependent, their GDP per capita tends to be very close when compared to one another.
How are Nigeria and Cameroon different?
As it stands, Nigeria and Cameroon are two poor and impoverished nations with an economy that is mostly dependent on crude oil. In spite of this, both countries have made tremendous strides towards economic development in recent years. The number one cause of Nigeria's economic downfall in the 1970s and 1980s was its heavy dependence on crude oil, which has since been displaced by other forms of natural gas. According to the U.S. Energy Information Administration, Nigeria's crude oil production and refining capacity has more than doubled since 2010, while the country has emerged as the world's third largest natural gas producer after Qatar and the United States.
Which country has more potential for economic development?
A crucial factor in the development of any economy is the availability of natural resources. However, there is a clear distinction between the number of natural resources and the ability to extract those resources for use. One cannot sustainably extract a resource and continue to rely solely on it; a resource must be sourced, refined, and sold to generate income. Therefore, in the case of Cameroon and Nigeria, both countries are blessed with large resources of oil, but their abundance of natural resources is different, which contributes to a greater potential for economic development. The fact that each country is not only blessed with oil reserves but also fertile land is what gives Cameroon the edge in terms of economic potential.
The following chart summarizes some statistics. There are two countries mentioned: Nigeria and Cameroon. Niger and Chad were also mentioned but it is unlikely that they are separated in size by such a great distance. According to the 2016 CIA World Factbook, Nigeria's total GDP per capita is $3,005, while Cameroon's is only $1,000. The estimated GDP per capita for each country for 2017 is $4,220 in Nigeria and $1,310 in Cameroon. While Nigeria has the potential to be more economically developed than Cameroon, there is no reliable data to say with certainty which country has the more potential.
This article was originally published on Trading Economics and has been republished with permission.