New GDP places Nigeria for faster economic growth

The Executive Secretary, UN Economic Commission for Africa (ECA), Carlos Lopes said the emergence of Nigeria’s new Gross Domestic Product (GDP) has placed her in a new world economic perspective for faster growth.
Lopes told journalists in Addis Ababa on Thursday that the upward review of Nigeria’s GDP had significant implications on the Nigerianeconomy through the application of the 2008 System of National Accounts (SNA).
“Nigeria’s new GDP has important implications for the rest of the continent. It raises the question whether there are other African economies with a systematically underestimated GDP.
“Using a recent base year and applying the 2008 System of National Accounts (2008 SNA), implies that the price structure is more representative of the economy’’, he said.
He explained that a wider basket of products and activities were considered when national accounts were calculated.
He said the result of the re-benchmarking of Nigeria’s accounts suggested that the real size of many African economies might likely be larger than their current estimates.
“It also suggests that as a whole, the role of the African continent in the global economy might have been underestimated. “
The News Agency of Nigeria reports that Nigeria’s nominal GDP had nearly doubled; becoming Africa’s largest economy and the 26th largest economy in the world after it was re-based with the application of the 2008 SNA.
According to the National Bureau of Statistics (NBS), the latest GDP estimate of N80.2 trillion or 509.9 billion dollars is 89 per cent higher than the previous figure, based on the Central Bank of Nigeria’s average exchange rate for 2013.
Nigeria’s debt to GDP ratio had dropped from 19 per cent to 11 per cent.
The GDP is attributable to the emergence of new economic activities, particularly the growing services sector.
This includes telecommunications, banking and entertainment services with the share of services in GDP rising from 29 per cent to 52 per cent.
Lopes, however, hoped that a more diverse economy would strengthen consumer base to attract more foreign direct investments.
“In releasing the new GDP figure, NBS made available all the data and methodological bases.
“This shows the maturity of the Nigerian statistical system, which is a foundation for good governance and sound policy and decision-making’’, Lopes said.
ECA’s 2014 African Centre for Statistics survey showed that seven African countries still based their GDP on 1990 data or earlier years.
Ten countries have their base-years between 1991 and 2000 while 19 others have base-years between 2001 and 2005.
Dozie Ezigbalike, Head of the African Centre for Statistics at ECA, said only Nigeria and eight other African countries had partially or wholly adopted the 2008 SNA, while the other countries were still using previous versions.
“As shown by Nigeria’s case, it is crucial for African countries to regularly re-base and re-benchmark their GDP figures, considering current lists in the basket of products and activities that better capture the size, structure, and trends of economy.
“It is also important that countries use the same classification and methodologies for better cross-country comparisons and regional integration”, he said