By Chief Lawson A. Omokhodion

The base year for computing Nigeria’s GDP has now been officially shifted from 1990 to 2010. By 2016 government says the base year would shift to 2015 and every five years thereafter. In a country devoid of good news there was palpable excitement on the part of Nigerians and the federal government. Something positive is coming out of ‘Bethlehem’. With the excitement over, the time for sober reflection and introspection is here.

Following the rebasing of the GDP the estimated size of the Nigerian economy in 2013 is now US$510 billion (N80.22 trillion) with a per capita income of US$2,688. The rebased nominal GDP for 2013 represents an increase of 89.22% over the nominal GDP using the old base year. This rebased GDP makes Nigeria the 26th largest economy in the world and in terms of GDP per capita it is the 121st in the world.

By rebasing the economy the composite sectors of the economy increased from 37 to 46 meaning that more sectors like telecommunications, entertainment, motion pictures, vehicle assembly, ICT and a few others were added. It is gratifying to note that the structure of the Nigerian economy is changing and the dramatic rise in the share of services in the nominal GDP has displaced the old belief that agriculture was the largest contributor to Nigeria’s GDP.

In the 2013 human development report Nigeria is ranked 153 out of 186 countries in the world. Despite the rebased GDP Nigeria, according to the World Bank, is one of the five countries with the largest concentration of poor people in the world. In Nigeria 60% of its people or over 100 million Nigerians live on less than $1.25 per day which has become the measure for extreme poverty.

With the rebased economy, in the best of times Nigeria generates about 4,000 megawatts or less of public electricity to power the 26th biggest economy in the world. While announcing results of the rebasing, the National Bureau of Statistics announced that growth in GDP is not synonymous with increase in job creation and that increase in the overall economic output of a country does not necessarily mean increase in incomes of individuals.

Actually the Statistician-General of Nigeria was actually referring to the contradictions inherent in the Nigerian situation because all over the world the experience is exactly the opposite of what he said. The rebased economy ran shy of telling Nigerians the unemployment rate in the country but even without taking the trouble to give us the estimate we know that the composite unemployment rate is about 30% while the youth unemployment rate is nearly 50%.

Nigeria is now the largest economy in Africa beating South Africa to a distant second but Nigeria’s newly derived GDP per capita of US$2,688 still lags behind South Africa, Egypt and Tunisia. Let me quickly add that the last base year used to compute the GDP of the South African economy was 1998. But does this all mean that the rebased Nigerian GDP is meaningless? Not really but it weighs President Jonathan’s burden.

Nigerians already knew that the country is blessed with bountiful resources but with corrupt and unsympathetic leaders. The rebased GDP is not a gimmick. It truly represents the Nigerian economy using prices of 2010. In 2014 the 2010 prices have changed already. So the economy is even bigger now than it was in 2010. To arrive at the new GDP data every known and respectable organisation was involved.

The UN, IMF, World Bank, ADB, local and international economists and a painstaking National Bureau of Statistics were involved. It was therefore a job well done. However, it is the best case yet of what classical economics calls growth without development. This expression is a fundamental measure of the wellbeing of a society. Having rebased its GDP Nigerian economy became larger than the economy of Austria, Malaysia and Indonesia amongst others.

The South Africans have jeered at our new size and have described the economy as a big house on faulty foundation. The Nigerian economy remains empty without infrastructure. An economy that has no intra-city rail service, an economy where no city can boast of portable water across the length and breadth of its city limits, an economy that accounts for 10% of global infant and maternal mortality rate cannot in good conscience relish at a huge size devoid of quality.

The rebased Nigerian GDP is like the situation of a supposedly wealthy man whose house leaks from every corner and the children cannot eat, cannot go to school, cannot visit the hospital when ill, have no clothes to wear and have no water to drink and yet the man is described as rich.

The National Bureau of Statistics says that rebasing will give the Nigerian government tools to better tackle the challenges of growing the economy and fighting poverty. It is vital that Nigerians know what it is to be the 26th largest economy in the world by GDP. It means Nigeria has an economy bigger than Austria’s. Austria is a European economy and it is one of the ten most comfortable countries in the world. Let us look at Austria so that the Nigerian President and his government know what Nigerians expect from an economy with Nigeria’s new GDP.

In 2012, Austria was one of the countries surveyed by the OECD on life satisfaction index. Out of the OECD countries in Asia, Europe, America and Australia ten countries were selected as the world’s happiest countries and their citizens as the world’s most satisfied citizens. Seven parameters were applied viz: life satisfaction, employment rate, self-reported good health, employees working long hours, disposable income, educational attainment and life expectancy.

These measures of quality further examined homicide rate, sense of feeling safe walking home at night, quality of drinking water etc. Ten countries stood out as the happiest in the world namely Denmark, Norway, Netherlands, Switzerland, Austria, Israel, Finland, Australia, Canada and Sweden. In the case of Austria, whose GDP is way below Nigeria’s rebased GDP, its life satisfaction score was 7.5 out of 10 meaning that 75% of its people were happy with their life conditions.

82% of Austrians were happy with the level and quality of educational attainment and a self- reported good health score of 69%. Life expectancy of the Austrian in 2012 was 80.7 years with a feel safe factor of 70%, a homicide rate of 2.1 murders per 100,000, and 5% unemployment rate. Yet Austria’s GDP is less than Nigeria’s rebased GDP.

The challenge for President Jonathan is to better the lot of Nigerians on the heels of the rebased GDP. Reporting a huge GDP cannot be an end in itself. GDP must mean growth and development. It must mean good health, good roads, good education, good electricity supply, good housing, good food and extremely low corruption. John Adams, the 18th century American statesman says that “The happiness of society is the end of government”.

Arguing further, Eleanor Roosevelt, author, speaker and wife of a former American President Franklin D. Roosevelt said “Happiness is not a goal; it’s a by-product”. Therefore for Nigerian citizens to appreciate their rebased status the government must invest considerable energy and resources in building and developing systems and structures that would guarantee the happiness they seek. Nigerians must benefit from the growth of their economy.

A GDP of US$510billion must translate into a better society for Nigerians. The federal government should develop a list of quick wins or low ha
nging fruits to harvest on the strength of a rebased economy. The unemployment rate should be the first casualty of a rebased GDP. The Nigerian constitution provides that the federal government shall operate a mixed economy model of development.

It means both the public and private sectors must play a role in its development. The federal government and other state governments should borrow a leaf from the Lagos state government to see how a government can gainfully engage in the productive sector of the economy. The business of government is both in business and government. Government has business in business.

As it provides enabling environment to the private sector, it must make the public sector responsive to society. The federal and state governments should clear the streets of unemployed graduates of Universities, Polytechnics and Colleges of Education immediately. In 1986/87, faced with a crushing unemployment problem, the federal government under President Ibrahim Babangida opened up the civil service and ordered mass recruitment of staff into the service.

In no time unemployment ceased to be a problem and some of those recruited graduates today are directors in the federal service. To start, all establishment positions in the MDAs should be filled. For every ghost worker fished out, a true person must be recruited in its place. Nigerians must be allowed to guide the growth of this economy by supervising, regulating, monitoring and overseeing different aspects of the system. The ministries must be alive to their mandate because they were not set up to simply award contracts.