Figures emerging from Nigeria’s Gross Domestic Product rebasing exercise are already suggesting that the nation’s economy could show as much as a 65% uplift in size, when the long awaited report is released.
This would show as much as $432 billion in GDP size, placing Nigeria as the largest economy in Africa. The latest figures, which are far above the earlier projections, indicate that the Nigerian economy has been grossly underestimated over the years.
Trusted sources, who have been observing the exercise since the tail end of Q4 2013, indicate that the figures which are still being validated, show a marked increase of more than 70% presently, but could on a worst case scenario, hover around 65% when the figures are filtered. The exercise is expected to be concluded in about a month.
According to a reliable source, this massive upward review is being driven by almost all the sectors of the economy but major contributions are particularly seen in the service sector, among others. He noted that the numbers, yet to be validated, are showing major shifts in the structure of the economy – major sectors like agriculture, wholesale and retail trade are losing dominance in their contributions to GDP even though they have also expanded in absolute numbers.
The numbers also show that services, another major component of the GDP, has been hugely underestimated in many years but now shows significant share in output. Another interesting finding, according to the source, is that entertainment has been hugely underestimated in the present GDP estimations but has shown an over 200% jump in the current recalculations.
Using the emerging numbers as a yardstick, the new rebased figures would show that Nigeria’s economy has not just overtaken South Africa at around $370 billion, but has done so with an overwhelming gap. The significance of the new figures is also that the GDP per capita could increase to over $2,600 from around $1,700, taking Nigeria into the middle income class.
A possible reduction of growth rates to 5 – 6% from 6 – 7% had been projected, but analysts argue that this is unlikely, since Nigeria still has a huge potential to grow. They think that the decline in growth is only possible if government halts ongoing reforms – especially in the power sector, which is expected to trigger a boom in economic activities.
Nigeria is rebasing its GDP for the first time 23 years, to capture input from various sectors of the economy and align them with present realities. The new base year is 2010. According To Yemi Kale, Statistician General of the federation, the official release date is likely to be in February. The new date is coming after several deadlines to implement the recalculations had been missed.
The head of statistics informed that the economy is no longer going to be dominated solely by agriculture, wholesale and retail trade. According to him, agriculture; wholesale and retail trade; crude, petroleum and natural gas contribute 70% of the GDP in the current estimates, but according to the new rebased figures, the shares of Agriculture, Wholesale and Retail Trade are going to be significantly less than 70%. He also confirmed that the bureau has increased the number of activities used for GDP computation, from 33 presently to 46 in the rebased GDP.
Nigeria uses three broad sectors to calculate its GDP- Agriculture, (which includes, crop production, forestry, fishery, and livestock); Industry, (including oil and gas, manufacturing, mining etc); and Services- (hotel and restaurants, real estate, education, transport, entertainment, telecommunications, banking and finance etc).
Nigeria’s rebasing exercise has attracted a lot of interest, both locally and internationally. The Head of the Country’s Statistics Bureau had assured severally that the data bureau would be as transparent as possible in this exercise.