NIGERIA TO INCLUDE PROSTITUTION,OTHER ILLEGAL ACTIVITIES IN GDP SUMMATION

The National Bureau of Statistics said it will add illegal and hidden economic activities like prostitution and drugs peddling  while calculating the country’s Gross Domestic Product, (GDP). 

The NBS made this known at a sensitization workshop on GDP and Consumer Price Index, CPI Rebasing organised in collaboration with the Nigerian Economic Summit Group (NESG).  

Nigeria’s statistical agency  has proposed 2019 as a new GDP base year and 2024 as new base year for inflation computation.  
 
Moses Waniko, a senior official at the National Bureau of Statistics (NBS), said the new exercise could show that Nigeria has a bigger economy than currently estimated.
 “There are economic activities that have no legal backing,” he said, citing prostitution. “The practitioners earn income from them and sometimes live bigger than those in the formal sector. At the end of the day, the income earned impacts the formal economy,” Waniko said.
 
He  added that a new calculation was necessary to reflect changing economic realities.
 It will consider 2019 as the base year, he said that new segments to be considered in the calculation include the digital economy, health and social insurance, pensions, modular refineries, mining and households employing labour. 

“We expect that the size of the economy will be bigger,” he said. 

Dr.  Baba Madu, Head of National Accounts,  NBS, said  the inclusion of Illegal activities will be in line with the national best practices, that is System of National Accounts, SNA  2008. 

"If you are into, for instance, drugs, there are some countries, it is  this drug  that is driving their economy. It is illegal here because there is no legal backing. Also prostitution, they also earn income. Some even live bigger than those in the formal sector. The SNA does not say no to these, it is we. But the challenge is the legal backing  and how do we get the data.  
 
“And then, of course, the hidden economy. If I ask you,  how much do you earn in a month, you will lower your income. Or if somebody is selling provision in a store, and before you know it he started  selling India hemp. Those are the things we are seeing. There  are challenges all over the world. But the beauty is that they are less than 3.0 to 3.5% of the GDP.” 

Meanwhile, Dr. Tayo Aduloju, Chief Executive Officer, NESG,highlighting the benefits of GDP rebasing, in his welcome address, said: “Accurate data enhances credibility. Our debt-to-GDP ratio, a critical indicator of fiscal health, dropped from 19% to 11% after the 2014 rebasing.  
 
Emphasizing the importance of the GDP and CPI rebasing exercise, Prince Adeyemi Adeniran, Statistician General said “The rebasing is a vital exercise that ensures our economic indicators are current and accurate reflections of the economic realities on the ground. As economies evolve, new industries emerge, and consumption patterns shift, it becomes imperative to update our statistical measures to capture these changes". 

There is need for a modification as Nigeria last revised its GDP in 2010.