The GDP re-basing that should be celebrated
By Matthew Adejoh
A bunch of Nigerians was watching the final of the African Cup of Nations; and, against all odds, with the wobbling and fumbling of the country's team, Nigeria won the cup, after a very long while. Some Nigerians hit the streets to celebrate. In other African cities the next day, they walked tall, especially in cities of South Africa, where they are usually despised and looked down upon, amidst persecution.
The common man on the streets of Nigeria did not get a kobo for the victory; neither was the price of fish in the market affected the day after the finals, but it felt good to be a Nigerian; and show once again that with proper planning and getting our acts together, we could rule the black world, if not the whole world.
As a reputable newspaper crafted the story of the re-basing, it read like we just won another African Cup of Nations in the economic sphere. The Guardian wrote on Monday, April 7, 2014: “Nigeria's economy may have emerged the largest in Africa and the 26th biggest in the world, going by the rebasing of the nation's Gross Domestic Product (GDP) data Sunday.
“Under the rebasing exercise carried out by the National Bureau of Statistics (NBS), the forecast for the nominal GDP for the country in 2013 was put at $509.9 billion, up from $264 billion under the old rate in 2012. South Africa, hitherto considered the biggest economy in Africa, has a GDP figure of $384.3 billion in 2012, while that of Egypt was put at $262 billion during the same period.
“However, the rebased GDP figure may not have, in real terms, put the nation's economy ahead of South Africa, according to experts. For instance, they said with the nation's population, the per capita GDP still ranks lower than that of South Africa with a population of 51.19 million.
“Besides, they noted that with the lingering parlous infrastructure crisis rocking the nation's economy and higher poverty headcount ratio, South Africa and indeed several offer other African economies remain more competitive than that of Nigeria.”
But this writer wonders now that more reliable figures are out whether competitors will not want to do business with Nigeria over and above the others within the continent and outside of it? A few days ago, we were told by the World Bank that we were in the same category with China, Brazil and India, three of the fastest growing economies of the world, for the wrongest of reasons. We were told by the World Bank that we harbor some of the poorest of the poor. What a company; and what an irony!
Shortly after, the news hit the air that with the re-basing of the country's Gross Domestic Product (GDP), some wet blankets think it is not cause for celebrations. Even the Minister of Finance and the Co-ordInating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, also sought to dampen the spirit with a remark that tended to suggest there was nothing to celebrate.
Nothing can be farther from the truth. Some economists, who are known more for theoretical expositions that do not affect the price of fish, also tended to want to discountenance the fact of the country being the largest economy in Africa. These same dyed-in-the-wool economists will never fail to cite China as world's next economic power despite the excruciating poverty in that land.
What is most painful is the gloatING denigration of these new statistics that put Nigeria in an enviable bracket, by even some political office holders. But I dare ask; is it not an achievement to have much more reliable statistics to plan and work with than the false ones that had been in place for nearly a quarter of a century? What is bad for these wet blankets and television economists like Bismark Rewane to have better figures to quote?
And what is wrong in knowing that my country, with one out of every five black persons on earth, is the largest economy with statistics that can titillate investors? Come on; let me gloat over that alone! Let me also applaud the present administration under Goodluck Jonathan for being the one that did this. After all, there have been those who have told us that they love Nigeria more than us and were not able in all their stay in power, either in the States or at the centre, to give us statistics to work with. If nothing, it pays to have a well-educated leader who works quietly and systematically, against those we now know were noisome patriots.
Two All Progressives Congress (APC) Governors, Fashola of Lagos and Ibikunle Amosun of Ogun, faulted Nigeria Bureau of Statistics (NBS) work which rated the country's economy as the 26th largest in the world, saying; “The new statistics does not truly reflect the real worth of the country's economy.”
Fashola said, “If the Nigerian economy has been stated on 1990 figures, it makes imminent common sense to restate them on much more contemporary figures that capture sectors that were hitherto omitted; like telecommunications, entertainment, arts, music, Nollywood and so on. The reality is that size only matters if it is efficient size. If it's big and suboptimal or inefficient, it really doesn't achieve the purpose. How to put that size to work is really the key and it's a no brainer that power will be defining for it.
“The estimates that suggest themselves by assessment, is that the power demand here (Lagos) is in the region of 10,000megawatts and more at a snapshot and an economy that is giving 25 percent to the GDP with 1000 and below megawatts just shows what we can unleash if we ramp up power supply. At this moment, the electricity sector has been liberalized; it is now for state governments to engage useful, sensible and mutually rewarding partnerships with investors and owners of the electricity assets.”
Amosun stated, “On the new GDP, something you will notice from the statistics released is that, it may say that we are the largest and whatever we are 26th largest economy in the world. And if one looks at the component of the GDP, one will realize that truly it isn't the real GDP that the country has done well in. Look at services alone, I think it is over 50 percent while manufacturing is under 10 percent.
“What does that tell us? It shows that something is missing. That isn't the best way. I would have been happier to see to the thing swap and to see maybe about 50 or 60 under manufacturing. That will mean real growth. And we cannot achieve all of these without power. Indeed the key to solve the challenge that we have today is power. Everyone needs power to do his or her business. And that is why the theme of this summit is better at this time. And until we solve power challenge, we will continue to have this GDP that is more of service based. And that is why the current GDP doesn't translate into reducing unemployment and outing food on our table.”
I really do not accept that both men are shooting down the work of the NBS, because they seem to be suggesting that now that we have these new figures, let us move up the next rung of the ladder and put it to good use; and that to me is a much better way to go as we await, perhaps, the discordant note from the APC mobile propaganda machine resident in Lai and his bevy of media consultants.
Adejoh contributed this piece from Abuja.