Following the release of Nigeria’s rebased Gross Domestic Product (GDP), which measures the total value of goods and services produced in the country, a surfeit of excitement has been oozing out from government circles. This has generated a false sense of optimism that our economy has become healthy. That impression, it must be said, does not reflect the true state of our economy.
According to the rebased GDP figures certified by the Statistician-General of the National Bureau of Statistics (NBS), Dr. Yemi Kale, the size of the Nigerian economy, as at 2013, is estimated at N80.3 trillion ($510billion). The updating of the GDP, the first since 1990, may have surpassed that of South Africa, with a World Bank GDP of $384.3billion as at 2012, to become the largest on the continent, and 26th in the world. Based on the rebased figure, the value of Nigeria’s nominal GDP in 2012 was N71.1trillion ($453.9billion).
The data used in arriving at the new GDP statistics show significant increase in economic activities, covering diverse sectors like agriculture, crude oil and natural gas, telecoms, real estate, manufacturing, finance and insurance, food, beverages and entertainment, especially the Nollywood industry and the informal sector. All these sectors reportedly contributed about 85.4 percent of the total GDP.
On paper, the rebased GDP may make Nigeria interesting to prospective foreign investors. However, the World Bank has swiftly cautioned that a rebased GDP is no guarantee for financial inflows, unless there are good policies and prospects to woo foreign investors.
We agree with the World Bank cautionary advice not to be carried away by numbers, because being a bigger economy is meaningless without a corresponding demonstrable evidence of improvement in per capita income and general standard of living of the people. This is the caveat in the rebased GDP and the unguarded effusions it is generating in government circles.
The irony of the rebased GDP is that no matter the rate of economic growth of any country, there will be no real development if it does not reflect or impact on the living condition of the citizens. And in Nigeria, Nigerians are worse off in three other indicators of economic health.These are per capita income, unemployment rate and high price indexes. By World Bank statistics, an average Nigerian survives on about $1 per day. This is far less than that of South Africa, which is about $9.75 per day, and that of an average Egyptian, which is put at over $6 per day.
Besides, the worsening unemployment in Nigeria put at an all time high of over 25 percent in 2013 by NBS, is disturbing. It means that one out of every four Nigerians were unemployed as at that date. There is no indication of any significant development since then. The implication is that Nigeria may be creating wealth, if GDP is anything to go by, but not creating jobs.
There is increased poverty level in the country, amid so-called economic growth. Only recently, the World Bank again listed Nigeria among the five poorest countries in the world. Definitely, such inglorious profile rubbishes whatever significant structural changes the federal government may lay claim to over the rebased GDP.
Put together, the current unemployment rate, high cost of living measured by Consumer Price Index (CPI) and rising poverty level in the country, represent a disturbing paradox. While a privileged few are living in opulence, the vast majority are wallowing in abject poverty. The deception in the rebased GDP is that the tiny but very wealthy few are the real gainers in the new updated figure, while the rest of our compatriots are the net losers.
Rather than being a source of undue excitement, we agree with the Coordinating Minister for the Economy and Minister of Finance, that the “rebasing of the GDP will not change the facts of our economy, or make poverty disappear overnight…”
The rebased GDP should, rather, be used to make better policies that will grow a sustainable economy and create jobs. Anything outside this will amount to living in denial.
