Sequel to the rebasing of its Gross Domestic Product (GDP), Nigeria was reported to have emerged as the largest economy in Africa and the 26th in the world. The exercise raised Nigeria’s GDP to $509.9 billion from the $264 billion that was calculated under the old rate in 2012. One notable outcome of the rebased GDP is that Nigeria has overtaken South Africa hitherto known to be the largest economy with a GDP of $ 383.3 billion in 2012. According to Nigeria’s Finance Minister, who also coordinates the economy, Dr. Ngozi Okonjo-Iweala, the rebasing has provided more information to the government on the state of the nation’s economy as the data generated will enable the government to put in place policies that will improve the living conditions of Nigerians.
Expectedly, views have been divergent on the announcement that Nigeria has been suddenly catapulted to great economic heights. The dramatic rise has been attributed to wider diversification and significant changes that have taken place in the economy. There has also been the contention that the economy is becoming more and more service driven. The rebasing has also been said to be more comprehensive than previous ones in view of the increase in the number of economic activities covered by the computation from 33 to 46.
It has, however, been vigorously argued that the emergence of a big economy requires much more than calculating and churning out figures on a range of activities. A rebased GDP is thus not enough to put Nigerians’ living conditions ahead of South Africans’. Experts have contended that with Nigeria’s population, the per capita GDP is clearly lower than that of South Africa which has a population of 51.9 million. They have also pointed out that the pathetic state of infrastructure which has made the realisation of production targets impossible for decades could not have enabled Nigerians to attain a pre-eminent economic status despite the ‘progress’ awarded the nation’s economy by the rebasing of its GDP. The seemingly intractable problem of corruption is widely seen as a major disincentive to foreign investors who have been heading for safer climes.
Apparently excited about the reported outcome of Nigeria’s rebased GDP, President Goodluck Jonathan said on his Facebook that the exercise gave “an accurate picture of where we are as a nation”. He, however, said he would not celebrate until all Nigerians could feel the positive impact of the growth because “there are still many of our citizens living in poverty”. The fact to note is that the reported 60 per cent increase in per capita income between 2009 and 2013 has taken place largely on paper and not in the people’s pockets. Whatever the increase that has been experienced in the inflow of petro-dollars within this period has ended up in the pockets of a handful of people who have easy access to public funds. Certain pertinent facts are incontestable about the Nigerian situation. It is crystal clear that the magnitude of the problem of unemployment has not been diminished. The performance of public utilities has not improved. National institutions have not been strengthened. Brain drain and mass migration to other lands have continued unabated. Collapsed industries have not been revived while those that relocated to other climes have not been brought back. A conducive environment is yet to be created for businesses to thrive.
Capacity utilisation in industries is still low. Where then lies the impact of the economic miracle?
As stated by the finance minister, the exercise of rebasing the GDP has produced information which the government can use in the formulation of policies that can improve the lives of Nigerians. The logical inference deducible from this is that the GDP figures are not an evidence of development but a source of data that can be used to plan for development. How does such an exercise translate into an improved financial status to the people in a country where basic necessities are not available for individuals and organisations to realise their full potential? The Human Development Indices Report of the United Nations Development Programme provide on annual basis ample evidence of continued deterioration in many critical facets of Nigeria’s national life.
President Jonathan has rightly said that he will not celebrate what he sees as Nigeria’s economic feat for the simple reason that “there are still many of our people living in poverty.” The obvious fact is that there is nothing to celebrate in a paradox of more money and more misery. The GDP as a measurement instrument has not been reflecting the reality of Nigerians’ situation. The World Bank has just categorised Nigerians as being among the most impoverished people in the world. And in spite of official protestations to the contrary, it remains a glaring fact that poverty is a pervasive feature of life in the country. Instead of gloating over an exercise that has changed nothing for the people, Nigeria’s economic managers should shift their focus to the provision of basic requirements. As the World Bank’s Chief Economist, African region, Mr Francisco Ferreira, puts it: “Really, what matters in the end is the per capita income. What matters is individuals’ living standard.”
A rebased economy should engender policies that will result in better living conditions for the teeming Nigerian poor.
It is clear that the government is working to ensure that the increased GDP translates to better living conditions for Nigerians.