By Peter Egwuatu

The Regional Head of Research, Africa, Standard Chartered Bank , Razia Khan has said that inflation is a key threat to Nigeria’s growth in 2011.

She stated that Nigeria’s demographic outlook was positive and its projected growth offers “huge opportunities, not without risks.”

Speaking to newsmen recently in Lagos on the topic titled: “Nigeria & the Supercycle” Khan, who disclosed this recently in Lagos, stressed that Nigeria, may lead Africa from 2013 as the continent’s biggest economy given its growth potentials.

According to her, “Nigeria may overtake South Africa to become the continent’s largest economy in couple of years especially if it would be able to harness its resources effectively.

According to her, “the capacity of the Nigerian economy to absorb a rapidly growing working-age population will be key to achieving the 2013 growth projection.

According g to her,  “ assuming South Africa grows by 4 per cent and Nigeria by 7 per cent, Nigeria will become the larger economy by 2013.”

She noted that Nigeria has a population of more than 150 million, three times as many as South Africa,” adding that “about 42 per cent of that population is under the age of 14, compared with 31 per cent in South Africa.”

She also said that the size of Nigeria’s domestic market, its oil and gas reserves and sales of bank stakes have been attracting investors, including banks such as Standard Chartered and Africa’s largest, Standard Bank Group Ltd.

She pointed out  that Nigeria’s GDP was projected to grow by about 7 per cent this year, which is higher than the 6 per cent mark recorded in 2009.

According to her, “the non-oil sector, especially, agriculture, wholesale and retail trade, and services are expected to remain the major drivers of growth although that is forecast to be complemented by a modest increase in the growth of the oil sector.

She noted that the private sector credit growth still tipped to recover, adding that it was still a challenge “earlier financial sector deregulation/ outsized financial sector did little for real economy” she added.

Commenting on fixed income, foreign exchange, she said, “Despite Nigeria’s rating strengths, concern over economic management is rising. Depletion of excess crude account has pressured foreign exchange ( FX) reserves .

Proposal for the establishment of a sovereign wealth fund is positive, but greater transparency required.”
On global review, Khan said, “disruption to Japan’s economy will add to global inflation pressures. Supply chains may be affected and demand for oil and gas will rise.