- Nigeria’s GDP rebasing meets global practices, gives accurate state of the econom
The Tinubu Media Support Group (TMSG) has said that there is nothing wrong with Nigeria infusing figures from the underground economy into its Gross Domestic Product (GDP) calculation for the ongoing rebasing exercise.
In a statement signed by its Chairman Emeka Nwankpa and Secretary Dapo Okubanjo, TMSG argued that the decision by the National Bureau of Statistics (NBS) aligned perfectly with global best practices.
It said: “Since the National Bureau of Statistics NBS revealed plans to rebase Nigeria’s Gross Domestic Product (GDP), there had been an uproar from a section of the public over plans to include underground economic activities into the calculation.
“We consider the uproar misplaced and coming from a misinformed mindset not only because many people have little understanding of what GDP really is but also because petty politics has crept into the conversation.
“For the avoidance of doubt, what the NBS is doing perfectly aligns with the United Nations System of National Accounts (SNA) 2008, a statistical framework jointly developed by the United Nations, World Bank, European Union, International Monetary Fund and the Organization for Economic Co-operation and Development.
“It was designed to provide a realistic and comprehensive view of the economy of any nation and for Nigeria to adopt it to rebase its GDP means that the NBS would have to capture all segments of the economy in its basket.
“This would include economic activities that were not included in the 2014 rebasing which was based on a 2010 template which, according to NBS, did not include the digital economy, pension fund administration, activities of the National Health Insurance Scheme (NHIS), modular refineries, etc as well as illegal and hidden economic activities.
“And although some Nigerians are frowning at the prospects of including underground economy on ethical grounds, simple research will show that it is not new as many countries across the world have, for years, added these activities into their GDP calculation.
“There is hardly any EU country that does not have data on these hidden activities in its GDP since 2014, and there are indications that South Africa included it in its 2009 GDP calculation.
“We need to add also that the idea is not to glorify or eulogize illicit economic activities such as drug trade or prostitution. Like many countries that have adopted the template, it is meant to provide the authorities with accurate data on these hidden activities, which typically contribute only about 3.0% to 3.5% of the GDP of countries.
“So it is disingenuous and inconceivable for anyone in this internet age to accuse the federal government of encouraging illicit activities based on the plan to include underground and unreported economic activities into its GDP calculations
TMSG also argued that the outcome of the rebasing will be a more accurate account of the Nigerian economy than the current one, which has 2010 as a baseline.
“And while it is too early to speak on the outcome of the GDP rebasing which will have 2019 as the base year, it is also necessary to debunk the claim that it is meant to artificially raise Nigeria’s GDP.
“We believe that more attention should be on the necessity of a survey of economic activities nationwide which would enable the federal government to determine the structure of the economy, the sectors that drive growth as well as areas that require government intervention.
“We also consider it necessary to add that the GDP rebasing will also put more accurate data on fast-growing sub-sectors like the digital economy, which is a subset of the services sector.
“This is because the last time Nigeria rebased its GDP in 2014 under the administration of former President Goodluck Jonathan, it was based on 2010 data which cannot be a true reflection of the developments in the economic space”, the group noted.
It urged Nigerians to ignore attempts to discredit the ongoing gross domestic product (GDP) rebasing with uninformed rhetoric.
END.
