GDP rebasing
From Benjamin A Ameh, Lagos
The Gross Domestic Product (GDP) rebasing exercise suggests that by mere statistical adjustments and better measurement of Nigeria’s economic activity, the country is on its way to achieving the Vision 2020 target, Opeyemi Agbaje, CEO, RTC Advisory Services Limited has said. The Vision is to place Nigerian among the best 20 economies in the world by year 2020.
Agbaje made this know while delivery a lecture at the Finance Correspondents Association of Nigeria (FICAN) Bi-Monthly Discourse held on Wednesday in Lagos said rebasing makes Nigeria the 26th largest economy in the world and biggest African economy by 2013.
Speaking on the theme: ‘Nigeria’s Economy in First Quarter 2014: Issues and Outlook’, he pointed out that GDP rebasing does not imply an increase in national income and productivity adding that GDP is not a measurement of income, but of economic output and production within an economy.
“GDP rebasing doesn’t alter our poor performance in terms of poverty, unemployment and inequality-GDP rebasing doesn’t change the material conditions of individuals, homes and firms within the economy,” he noted.
CEO, RTC Advisory Services Limited stress further that the feat also enhances the country’s Vision 2020 target considering its GDP growth rate post-rebasing averaging 6.4 per cent.
Agabje believed the exercise gives Nigeria a more accurate picture of the current state of our economy and presents a more credible and contemporary report of the state of sectors and overall activity within the economy.
Continuing, he stated that: “Nigeria’s GDP rebasing clarifies some previously unresolved incongruities in our economy, like why the large global telecommunications companies and sector analysts under-estimated the potential depth and size of the sector pre-digital mobile license auction in 2001”.
He affirmed that the exercise, also clarifies issues relating to why per capita GDP appeared somewhat larger than previously thought. Mr Agbaje added that is a commonsense measure consistent with global best practice that simply updates a country’s assumptions and templates for measuring our level of economic output.
“Continuing to use a base year of 1990 to quantify output in Nigeria contrary to global convention of rebasing at least every five years would have been irresponsible and incompetent. On the other hand, no one earns any plaudits for merely re-basing GDP just like no one receives commendations for using a time piece that correctly tells the time. We simply now know the reality about the size of our economy, which is a good thing,” he stated.
On the benefits of the exercise, Agbaje throw more light on the issue that Nigeria would now have better economic data for policy analysis and planning. Also, the size and global ranking of Nigeria’s GDP means it has acquired increased strategic stakes within the context of the global economy. “The case for Nigeria being a BRINCS (Brazil, Russia, India, Nigeria, China, South Africa) economy is probably compelling in the light of us becoming a $510 billion economy.
Nigeria’s imminent top 20 economy status makes G20 membership or at least regular invitations likely or inevitable,” he added.
Above all, Agabje said, the fact that there is more accurate information about sectors and output is good for potential investors, both foreign and domestic even as financial markets would probably take more interest in the Nigerian economy given its new GDP figures.
