UPDATED: Nigeria declares N80.3 trillion GDP, beats South Africa as continent’s biggest economy

Ngozi Okonjo-Iweala

Nigeria’s last GDP rebasing was done in 1990

Barely days after being listed by the World Bank as one of five countries with the highest number of extremely poor people, Nigeria has declared a Gross Domestic Product, GDP, of N80.3 trillion ($509.9bn), pushing ahead of South Africa as the continent’s biggest economy.

The new figure was announced Sunday by the National Bureau of Statistics after a rebasing that nearly doubled Nigeria’s GDP from N42.3 trillion.

The new GDP compares with South Africa’s GDP of N60.7 trillion ($370.3bn) at the end of 2013.

The GDP index is the total value of a country’s goods and services over a period of time.

Rebasing is carried out to give the most up-to-date picture of an economy as possible. Many countries rebase their GDPs after every few year but Nigeria’s was last computed in 1990 when there was limited growth in most economic sectors.

The new calculation, released by the statistics bureau, now includes previously uncounted industries like telecoms, information technology, music, online sales, airlines, and film production.

The new figure shrank Nigeria’s debt-to-GDP ratio to 11 percent for 2013, against 19 percent in 2012, the Statistician-General, Yemi Kale, said on Sunday.

But many Nigerians and economists believe such numbers do not bring any change to a country with about 70 percent of its population in extreme poverty.

“GDP rebasing is not an end in itself. It is a means to an end. The end being the economic wellbeing of the average Nigerian. With the rebased GDP, our Per Capita Income is now $2,668 and the 121st in the world,” said Egheomhanre Eyieyien, a chartered accountant and a business consultant.

“We still have much work to do to increase our national wealth and ensure that the standard of living of our people us greatly improved. Our Human Development Indices (HDI) prove this point. We must improve on health care, access to clean water, life expectancy, maternal mortality, infant mortality, literacy, quality of education, employment generation and poverty eradication.”

Last week, the World Bank listed Nigeria alongside four others as countries with the world’s extreme poverty- a rating the Nigerian government rejected.

On a per-capita basis, South Africa’s GDP numbers are three times larger than Nigeria’s. Analysts say Nigeria’s output is underperforming with its population three times South Africa’s.

Analysts say the rebasing is to enable the government come up with figures to support claims of the superlative performance of the country’s economy, said to be growing at about 6.5 to 7 per cent annually.

But, the pronouncement by the World Bank President appears to have removed the sail from government’s wind, as it highlighted the disconnect between government’s statistics and economic reality.

The World Bank President, Jim Yong Kim, who was addressing participants at the Council on Foreign Relations, CFR, meeting in New York, named India, China, Bangladesh, and the Democratic Republic of Congo as the other countries in the new global poverty categorization.

“The fact is that two-thirds of the world’s extreme poor are concentrated in just five countries – India, China, Nigeria, Bangladesh, and the Democratic Republic of Congo,” he said.

“If you add another five countries — Indonesia, Pakistan, Tanzania, Ethiopia, and Kenya – the total grows to 80 percent of the extreme poor.”

Mr. Kim, who defined extreme poverty as “people living on less than $1.25 a day”, said “more than a billion people in the world live on less than that each day.”

Editor’s note: This post has been updated.

 

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