By Dele sobowale
“YOU can fool some of the people all the time; you can fool all the people some of the time; but, you can’t fool all the people all the time.”
— Abraham Lincoln, 1809-1865, Vanguard Book of Quotations, VBQ, p. 62.
When the Nigerian Bureau of Statistics, NBS, published the result of the performance of the Nigerian economy in the second quarter, 2021, Q2’21, it almost achieved the unheard of feat of fooling all the people of Nigeria all the time. The new Statistician-General, S-G, of the NBS deserves an award for successful propaganda.
Never in my over 30 years of writing articles in Vanguard was a deceitful report so successful in getting so many astute people fooled as the report released on August 26, 2021. It was a master-piece of statistical fraud in which a disgraceful failure was presented as a wonderful achievement.
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Before revealing the clever fake news let me demonstrate how the media and some respected commentators were caught in the web of deceit. Two examples will help in this regard.
Bismark Rewane and Peter Obi:
“If gold rusts, what then will iron do?” — Geoffrey Chaucer, 1342-1400.
One of the people I thought would never be caught in the FG’s web of deceit is Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company Limited. I read everything Rewane is credited with; and agree with his position 90% of the time. But, I was shocked to read that he said “the Nigerian economy is rising, and inflation rate is falling, but more people are living below the poverty line.” Unfortunately for Rewane, a member of the Presidential Economic Advisory Council, PEAC, which had been rendered redundant since it was established, even the NBS did not claim that the economy grew in Q2-21. Not at all, as I will shortly prove from what NBS released to a Nigerian public whose opinion leaders sometimes don’t read carefully; or don’t read at all, the relevant document.
Peter Obi, ex-governor, ex-banker, should have been Vice-President of Nigeria today if his country is not populated by naive people. He understands figures and can interpret statistical data. When asked what he thought about the 5% growth recorded for Q2-21, Obi, apparently believed that there was indeed, positive growth during the period under review. His quarrel with the announcement was that “growth with rising poverty is meaningless.” Again, Obi missed the main point. There was no growth in Q2-21; so he should have dismissed the idea as fake news.
Even the media was totally fooled.
“Nigeria records 5% GDP growth, economists doubt figure” – The Nation, Friday, August 27, 2021 page 20.
Several newspapers carried a summary of the NBS report on their front page. Most got it partly right; but, still fell into the trap of deception laid by NBS.
To start with, I received two text messages late night August 26, 2021, from those who received the news on late night television report.
“Have you heard that the GDP grew by 5% in the second quarter of 2021?” To the two individuals, my answer was the same.
“I have not seen the report; but I am certain the economy did not grow by 5% in Q2-21”. So, I was one of the economists who doubted the figures. We knew from long time experience how a government failing seriously resorts to propaganda.
A few days after the false report by the national paper, it ran an editorial based on the fallacious 5% Q2-21 growth. I was alarmed. This is a leading paper influencing a lot of decision makers at home and abroad making such a serious mistake by advancing the false narrative the Buhari administration wanted people to believe. It is pathetic.
What really happened?
“GDP rises 5% YoY, declines 0.8% QoQ”— Vanguard, August 27, 2021.
Virtually all the other newspapers I read on that day – NATION, DAILY INDEPENDENT, GUARDIAN – summarised the NBS report correctly. Even then, they still managed to partly fall into the trap set by NBS – whose managers realise that most Nigerians don’t know the meaning of YoY or QoQ. Let me start from there to open your eyes to how you have been fooled.
First, YoY means Year-On-Year; that means Q2-21 is compared with Q2-20. That also means that Q2-21 does not stand alone. The 5% only means that Q2-21 was better than Q2-20 by 5%; not that the economy grew by 5% in Q2-21.
Second, and this is the truth cleverly hidden from non-economists, QoQ means Quarter-On-Quarter. The comparison is between first quarter, 2021, Q1-21 and second quarter, 2021, Q2-21. And, what was the result? It was -0.80% approximately. That also means that the Nigerian economy actually declined by -0.80% in Q2-21 over Q1-21. It was not only a disaster; Nigeria has taken the first step towards another recession. Another negative growth in the third quarter, Q3, of this year will result in recession for two years in a row. We are not finished yet with this bogus report.
The first quarter, Q1-21, recorded 0.5% growth over the fourth quarter of 2020, Q4-20. The second quarter of 2021, Q2-21, declined by -0.78%. Simple arithmetic should tell the reader that by the end of the first half of 2021, the Nigerian economy is down by-0.28% over Q4-20.
Why was the result bad?
“Nigeria, 39 others may not attain pre-Covid-19 GDP levels by 2026 – W’Bank.” — News Report, September 23, 2021.
The World Bank, which received its own copy of the Q2-21 report from Nigeria, did not fall into the NBS trap. They expected a negative result; and so did I. We were not surprised that it was -0.78% drop instead of the 5% which is being celebrated by the Nigerian government. It was because there was no 5% growth that nobody observed any improvement in our economic environment.
Economies grow on four variables — consumption, government spending, investments and aggregate productivity.