Governance Africa: Burning National Issues Rebased GDP has no effect on welfare of Nigerians – NLC The Federal Government, on Sunday, announced the review of the country’s GDP after more than 24 years. A country’s GDP, which is an internationally recognised indicator for measuring the size of the economy, represents the total market value of all final goods and services produced within a country in a given period. The Minister of Finance, Ngozi Okonjo-Iweala, said one of the major benefits of the rebasing exercise was that policy makers and analysts would be able to use its results to bring out more accurate set of economic statistics for evidence-based decision-making towards a truer reflection of current realities. She said rebasing would also help reveal a more accurate estimate of the size and structure of the economy by incorporating new economic activities, which were not previously captured in the computational framework. Under the rebased statistics, Nigeria emerged as the largest economy in Africa and the 26th largest in the world, giving hope that the much touted goal of Vision 20:2020 of seeing Nigeria as one of the 20 biggest economies in the world by 2020 may be realised as projected The rebased estimates put the country’s nominal GDP in 2013 at about N80.2 trillion (about $509.9 billion), with comparative figures for the previous three years showing N54.21 trillion ($360.6 billion) for 2010; N633 trillion ($408.8 billion) for 2011, and N71.186trillion ($449.9 billion) for 2012. The changes between the old and new rates, Mrs. Okonjo-Iweala said, represented growth of 59.5 per cent in 2010, 69.13 per cent in 2011, and 75.58 per cent in 2012, with a forecast of 89.22 per cent for 2013. At the release of the new data, the NBS said the final estimates of the nominal GDP would be released by June 2014, while 2015 base year data would be available by 2016 when another rebasing exercise would be undertaken. The Statistician-General of the Federation, Yemi Kale, said the results revealed significant changes in the structure of the Nigerian economy, with better diversification than earlier reported. Mr. Kale said a key finding from the new data was that the Nigerian economy, like those of many other middle-income countries like Thailand, Malaysia and Egypt, was becoming more service-driven, with the significant expansion of the services sector The Federal Government reviewed the country’s GDP on Sunday, after more than 24 years. The Nigeria Labour Congress, NLC, has warned Nigerians not to see Sunday’s rebasing of the country’s Gross Domestic Product, GDP, as having any change in either their welfare conditions or the country’s well-being. The Chief Economist of the NLC, Ozo Esan, said that though the rebasing of the country’s GDP was a normal activity by government to determine a reliable statistical basis planning and decisions for economic development, successful governments in the country neglected to do it over the years. “Rebasing the country’s GDP does not affect anything,” he said. “Neither the welfare of the citizens nor the well-being of the country would change. In re-computing the country’s GDP and identifying the correct size of the economy only sends correct signals to investors (local and foreign) and planners, which will also help the process of the growth of the economy going forwards.” He described rebasing of the GDP of the economy as a normal technical matter that needs to be done periodically. He said that as a country, Nigeria had neglected to do it for over 24 years, despite some fundamental changes in the structure of the country’s economy. “With the emergence of new economic activities, it is important that a rebuilding is done to get the right statistical basis for national planning and decisions towards economic development,” Mr. Esan said. He however warned that Nigerians needed to be careful not to think that rebasing and re-computing the GDP implied that the country was better off. He noted that the country’s resources or the GDP income have not changed with the exercise. The NLC chief said what Nigerians should draw from the rebasing exercise was that, over these past years, successive governments have always gotten their decisions wrong, particularly on the welfare of the citizens, because they were basing their planning processes on wrong statistical data and calculations. Going forward, he said, Nigerians have to agree that all agencies of government involved in national planning, including the National Bureau of Statistics, NBS; Federal Ministry of National Planning; Federal Ministry of Finance; Central Bank of Nigeria, CBN; and other departments agree on what the regularity of the exercise would be. He said they must ensure that it remained consistent and not leave it again for the next 20 or 25 years. An Abuja-based public affairs commentator, Tope Fasua, said the rebasing exercise would automatically double per capita GDP of all Nigerians, thereby cutting off the growing dependence on aids. Mr. Fasua said a higher GDP would also improve some of the indices used by foreign investors and lenders, thereby improving the chances of Nigeria being able to secure more lending to grow the economy. “The issue is whether these loans will be well utilised, or will just send us into another debt trap,” he said. “It’s bad enough already. However, rebasing is normal in an economy from time to time for accountability and currency purposes.”
Posted on: Mon, 07 Apr 2014 21:07:07 +0000
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