There is no doubt that the rebasing of Nigeria’s national accounts to a 2010 base period from the long reported 1990 series throws up many discoveries that economic managers must leverage on.
The immediate outcome was a 91 percent jump in GDP to N81 trillion ($522 billion), leading to the emergence of Nigeria as Africa’s largest economy and 23rd largest in the world.
The major lesson was the fact that the rebasing exercise had produced “winners” and “losers” among the sectors of the economy.
Incidentally, the emergence of the services and manufacturing sectors with over 50 percent and 7 percent of the GDP, respectively, may have unwittingly created a kind of ‘disconnect’ in the nation’s developmental growth trajectory.
With the services sector basically import-oriented, the sustenance of the economy will be at a greater cost since the major link of processing from the raw materials to finished goods is missing – i.e., the manufacturing sector.
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Agriculture and oil and gas, which were regarded as major sustainers of economy, were discovered to be contributing less than expected and consequently lost GDP share as they were rebased to 22 and 14 percent of GDP, respectively.
Understandably, many economic activities had been grossly understated prior to the rebasing. For instance, telecoms is now 11 times bigger in share of rebased GDP, while 13 new economic activities have been added, with motion pictures production (Nollywood) now about N1 trillion economic activity. The rebasing also helped paint a “clearer” picture of our economic performance.
We have been discovered to be deficient in tax generation, at about 7.8 percent of GDP. This is against 45 percent in France; 39 percent for United Kingdom; 27 percent for the United States, and 12 percent in Tanzania.
Given the lower share of Agric (22 percent) and oil and gas (14 percent) versus services (51 percent) as revealed by the exercise, the comparative perspective with other economic blocs and developed economies is somewhat different.
For instance, compared with BRICS, MINT, UK, US and the world as a whole, Nigeria’s diversification story is minimal.
Consequently, as the country moves along the path of economic progress, it is imperative to find ways for a purposeful and coordinated diversification of the economy through boosting of non-traditional sectors, expanding the range of products and exports, and meaningful engagement with new economic and development partners.
There is no doubt that the exercise offers a glimpse at the potential of the informal sector, which had made the economy to be resilient so far. If the huge identified gap between 1990 and 2010 is anything to go by, then it provides opportunity for our managers to harness the potentials in the informal sector, which has not been accounted for over the years.
With another rebasing exercise by the National Bureau of Statistics (NBS) scheduled for 2016, there is also the need for consolidation on the gains so far with other data reforms such as inflation rebasing, unemployment index, among others.
