“How does this affect the price of fish?”, was the cynical rider to anewspaper report early in the week that Nigeria has overtaken South Africa as Africa’s leading economy. This followed the cheery news coming from the National Bureau of Statistics, which confirmed, of course, what many had long believed- that the Nigerian economy has been understated.
From the rebased Gross Domestic Product (GDP) figures, our country’s GDP has catapulted from $262 billion to $510 billion representing an increase of 94.6%. The new figures firmly put Nigeria ahead of South Africa with a GDP of $370.3, as the king of African economy.
Not only that the newly rebased figures confirm Nigeria as the 26th largest economy in the world. By rebasing the country’s GDP figures, what NBS has just done is to recalculate our GDP to more accurately reflect the nation’s changing economic configuration over the last twenty-four years. To be sure, the last time this rebasing took place was in 1990.
What the newly rebased GDP figures simply do is to present the truest picture of the size of the Nigerian economy by including sectors like the film and video industries, telecoms, as well as information technology, hitherto not considered in the last rebasing exercise.
Given some of the knee-jerk and overly jaundiced criticism of the rebasing coming from some quarters, especially the opposition politicians, one is tempted to ask the following questions: Was rebasing the GDP figures necessary? Is the outcome correct and dependable? Are there benefits derivable from the rebasing?
From the different accounts coming from experts and economy watchers the world over, there is nothing controversial about the rebasing of the GDP figures, which the government has just done. If anything, the exercise ought to have been carried out many years ago and even on a more regular basis. Rebasing the GDP figures is a global best practice that affords countries the opportunity to update their templates for measuring growth in the economy more accurately.
For instance, the newly rebased Nigerian GDP captures the activities in the emergent economic centres like Nollywood (the Nigerian entertainment industry),which has grown exponentially in the past ten years creating incomes, providing jobs, happiness and shared prosperity in the land. It is on record that no other entertainment industry anywhere in the world can match Nollywood’s rapidity in growth even as unorganised as it still remains.
It is interesting to note that cynics are not quarrelling with the newly rebased GDP figures for Nigeria. Instead, they are raising the issue of its utility. Yet, there are many who still believe that the size of Nigerian economy is larger than the picture painted by the new figures. And this group points to the fact that the value of the volume of trade and transactions that goes on daily in the effervescent informal sector is never tracked and consequently not captured by the rebased GDP figures. The daily activities of that seemingly poor food vendor at every motor park, street corners and even beside public buildings are never taken into considerations. The value of goods in the spare parts markets at Ladipo and other markets in Lagos did not contribute to the rebased figures. What about the roadside mechanics, carpenters and other artisans?
There is no doubt that if an accurate tab is kept on the value of the volume of goods and services in the informal sector, the newly rebased Nigerian GDP will outstrip that of South Africa by miles. Those cynics who rubbish the rebasing by suggesting that it means nothing and adds no value to the economy miss that point badly. Since rebasing illuminates the picture of the size of the economy, it is therefore axiomatic that it provides the accurate indicators for investors and economy minders. It vividly speaks to investors of sectors in an economy that are growing and attractive. In the same way, it provides policy makers the data on the sectors that need to be cultivated.
A ready example of this is what has been happening in the telecoms sector in the country. With the advantage of hindsight, it is now obvious that the telecoms sector was undervalued prior to its liberalisation and this explains why the sector has grown in our country faster than anywhere else in the world with about 120 million telephone lines sold by operators just in a decade! As an analyst has pointed out, the result of the rebasing has shown also that the nation is not taking full advantage of the size of its economy especially in the area of tax revenue.
Yes, the rebasing does not automatically translate to increased purchasing power for citizens yet it carries the potential of attracting more investments into the country, which will eventually improve living standards. And this is the challenge that rebasing poses to the government. Yet, it is baffling that some of our politicians are ever willing to play politics with everything. Their off-hand dismissal of the new status of Nigeria as the largest economy in Africa, simply because it happened under the watch of President Goodluck Jonathan, is petty and not statesmanlike. Why is it difficult for some people to see the good others see in us as a nation? Big country, big economy, big cynics!
Hamisu Abubakar contributed this piece from Abuja.