Nigeria’s recent decision to include illegal activities—such as drug trafficking and prostitution—in its Gross Domestic Product (GDP) calculations lays bare the desperate state of the country’s economic strategy. While this move aligns with international statistical norms, it raises profound ethical, practical, and strategic questions for a nation already grappling with poverty, corruption, and economic instability.
At first glance, the rationale seems plausible. The United Nations Statistical Commission recommends including all economic activities—both legal and illegal—to provide a comprehensive measure of a nation’s economy. Yet, for a country like Nigeria, where institutional weakness and systemic corruption remain pervasive, this approach may do more harm than good.
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GDP is a benchmark for assessing economic performance, but its inclusion of illicit activities threatens to distort its purpose. Nigeria’s reliance on illegal trades to inflate GDP figures risks normalising these activities and undermining the moral fabric of society. Worse still, it projects a government willing to lean on crimes it is supposed to combat, all in the name of economic optics.
By factoring in drug trafficking and prostitution, Nigeria may report a temporary boost in GDP. However, this is little more than a statistical mirage. These sectors do not represent sustainable growth, nor do they offer tangible benefits to the average Nigerian. Instead, they highlight a failure to address the underlying drivers of illicit activities: poverty, unemployment, and weak governance.
Accurately quantifying illegal activities is inherently fraught with challenges. These sectors thrive in the shadows, making reliable data collection nearly impossible. Estimating their contribution to GDP involves speculative calculations that risk further eroding public trust in Nigeria’s already beleaguered institutions.
Moreover, while countries like Italy and Spain have included similar data in their GDP calculations, they possess the institutional capacity to ensure accuracy and transparency. Nigeria, with its underfunded statistical agencies and opaque governance, lacks the safeguards to make this exercise anything more than a statistical gamble.
“Worse still, it projects a government willing to lean on crimes it is supposed to combat, all in the name of economic optics.”
Nigeria’s decision comes against the backdrop of a worsening economic crisis. The Naira has depreciated to a historic low of ₦1,547.49 to the US dollar, inflation continues to soar, and unemployment remains alarmingly high. Rather than addressing these structural issues, the government appears preoccupied with massaging economic metrics to paint a rosier picture.
Such a strategy is not only short-sighted but also dangerous. It diverts attention from the urgent reforms needed to stabilise the economy and lays the groundwork for further societal disillusionment.
Nigeria’s potential lies not in inflating GDP figures with dubious inputs but in leveraging its vast untapped resources. The agricultural sector, for instance, produces 20 percent of the world’s cassava and 70 percent of its yams. Yet most of these outputs are exported in raw form, fetching minimal revenue.
Value addition—processing cassava into starch or ethanol, for example—could generate significant foreign exchange while creating jobs. Similarly, the burgeoning tech sector offers immense promise. Nigerian fintech startups raised over $170 million in 2023 alone, underscoring the sector’s potential as a driver of economic growth.
However, unlocking this potential requires addressing systemic challenges. Poor infrastructure, an unreliable regulatory framework, and limited access to financing continue to stifle growth in these sectors.
GDP, while important, is not the sole measure of national progress. Countries like New Zealand and Bhutan have adopted alternative frameworks that prioritise societal well-being, environmental sustainability, and equitable growth. Nigeria would do well to follow this example, shifting its focus from GDP figures to the quality of life of its citizens.
Rather than padding its economic data with illegal activities, Nigeria must invest in sectors that offer sustainable growth. This includes fixing dilapidated infrastructure, reforming the educational system to equip citizens with modern skills, and fostering an environment where legitimate businesses can thrive.
The inclusion of illicit activities in Nigeria’s GDP calculations is a glaring symptom of a broader economic malaise. It reflects a government more focused on appearances than substance, willing to prioritise statistical gains over meaningful reform.
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Nigeria stands at a critical juncture, facing a confluence of challenges that demand decisive and transformative action. The path forward requires a departure from the path of short-term fixes and a concerted effort to address the deep-rooted structural issues that have plagued the economy for decades. This necessitates a comprehensive shift towards sustainable sectors, including agriculture, renewable energy, and technology, while ensuring that the benefits of economic growth are equitably shared across all segments of society. This requires a multi-pronged approach, including investing in human capital through quality education and healthcare, improving infrastructure, and creating a conducive environment for businesses to thrive.
The onus now lies squarely on the shoulders of Nigeria’s leaders. They must demonstrate the political will to implement difficult but necessary reforms, such as tackling corruption, improving governance, and fostering a more inclusive and equitable society.
Accountability must be paramount, with transparent and effective mechanisms in place to ensure that public resources are utilised efficiently and effectively. The time for empty promises and incremental changes has long passed. Nigeria has the potential to become a global economic powerhouse, but this potential can only be realised through bold leadership, strategic investment, and a steadfast commitment to creating a truly thriving and equitable economy. The choice is clear, and the time for decisive action is now.
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