] Issa Aremu,

The econ­omy: Re­based or trans­formed?

Daily Trust - - VIEWS OPINION -

We have been promised the trans­for­ma­tion of the econ­omy but we seem to have a Re­based econ­omy in­stead. Of course there are those who would ar­gue that re­bas­ing and trans­for­ma­tion are not mu­tu­ally exclusive. Some would even say re­bas­ing (which ac­cu­rately and com­mend­ably re­flected changes in the Nige­rian econ­omy in the last two decades) is a func­tion of a trans­for­ma­tion. Maybe. But cer­tainly re­bas­ing and trans­form­ing an econ­omy are not the same. The for­mer is in quan­ti­ta­tive terms while the lat­ter is in quan­ti­ta­tive terms. The United Na­tions de­fines re­bas­ing as the “process of re­plac­ing present price struc­ture (base year) to com­pile vol­ume mea­sures of GDP with a new or more re­cent base year.” Quan­ti­ta­tive Nom­i­nal GDP at cur­rent prices does have its use­ful­ness though. In quan­ti­ta­tive terms, we are now the big­gest cen­tre of goods and ser­vices in the con­ti­nent. The God­li­ness is in the de­tails for Nige­rian econ­omy. Ac­cord­ing to Yemi Kale, the DG of the Na­tional Bureau of Sta­tis­tics, on paper (i.e. in nom­i­nal terms,) the size of the econ­omy ex­panded by more than three-quar­ters to some es­ti­mated 80 tril­lion naira ($488 bil­lion) for 2013 com­pared to some $262.6 bil­lion. Con­versely the devil is in the de­tails for South Africa which has been beaten to a sec­ond po­si­tion in eco­nomic ac­tiv­i­ties at some World Bank’s 2012 es­ti­mated GDP of $384.3 bil­lion. To this ex­tent, the new Re­based fig­ure for Nigeria le­git­imizes Nigeria’s Su­per Ea­gles se­rial de­feat of Bafana Bafana in the round ball tour­na­ment. But the real econ­omy is cer­tainly not foot­ball tour­na­ment. Nigeria un­doubt­edly leads in nom­i­nal GDP no less as it is the cur­rent cham­pion of the African Cup of Na­tions for foot­ball. But in real quan­ti­ta­tive terms, SA’s econ­omy is stronger. Its GDP is driven more by value adding man­u­fac­tur­ing ac­tiv­i­ties com­pared to Nigeria’s econ­omy. Ac­cord­ing to United Na­tions in­dus­trial De­vel­op­ment Or­ga­ni­za­tion, UNIDO man­u­fac­tur­ing in­dus­try in Sub-Sa­ha­ran Africa (SSA) lags be­hind other de­vel­op­ing re­gions in al­most all mea­sures of eco­nomic de­vel­op­ment, namely in­come per head, in­dus­tri­al­iza­tion and agri­cul­tural pro­duc­tiv­ity. The dis­tri­bu­tion of man­u­fac­tur­ing ac­tiv­ity in SSA, mea­sured by the dol­lar value of man­u­fac­tur­ing value added (MVA), is highly skewed. Only ten out of 45 coun­tries have an MVA of one bil­lion dol­lars or more, while just one coun­try, South Africa, ac­counts for 27.3 per­cent of the sub­con­ti­nent’s to­tal MVA. In Nigeria, man­u­fac­tur­ing ac­counts for less than 4 per cent of the GDP. Nigeria’s new num­bers came in­ter­est­ingly from mar­ginal ser­vices such as movie; the mu­sic in­dus­try and the telecommunication sec­tor, which all com­bined to push Nigeria’s econ­omy over that of South Africa. Even at that, the lo­cal con­tent of these ser­vices is de­bat­able. In fact South Africa’s econ­omy drives Nigeria’s newly cap­tured ac­tiv­i­ties such as tele­coms and mu­sic and movie in­dus­try ( given that we must still watch bet­ter Nol­ly­wood films if only we pass through SA’s DSTV. All these mean that un­der

these new nom­i­nal fig­ures, South Africa is still ahead of Nigeria in qual­i­ta­tive terms. In­deed Nigeria still pa­rades lower per capita GDP of just 1000 dol­lars far less than South Africa at $6,800. Re­bas­ing there­fore does not mean Nige­ri­ans are bet­ter off than South Africans. In­deed we are worse than South Africa in pros­per­ity. Two-thirds of Nige­ri­ans still live be­low poverty line. Elec­tric­ity is still a lux­ury while lives are daily unavoid­ably wasted to poor health and trans­port fa­cil­i­ties. The list of ac­tiv­i­ties cap­tured un­der the re­bas­ing must have in­creased to 46 from 33 pre­vi­ously to in­clude “telecom­mu­ni­ca­tions and in­for­ma­tion ser­vices, pub­lish­ing, mo­tion pic­ture, sound record­ing and mu­sic pro­duc­tion and broad­cast­ing, arts, en­ter­tain­ment and re­cre­ation, fi­nan­cial in­sti­tu­tions and in­sur­ance as well as real es­tate”. How­ever the re­bas­ing must also in­di­cate many man­u­fac­tur­ing ac­tiv­i­ties that have dis­ap­peared in the last two decades. Which then now raises the is­sue of trans­for­ma­tion that Pres­i­dent Jonathan prom­ises. This ad­min­is­tra­tion will be bet­ter as­sessed in terms of promised trans­for­ma­tion agenda deal­ing with power sup­ply, agri­cul­ture and ben­e­fi­ci­a­tion in the ex­trac­tive in­dus­tries such as oil and gas. With whole­sale im­por­ta­tion of tooth picks to petroleum prod­ucts, tex­tiles to fur­ni­ture, it’s cer­tainly not yet a trans­formed Nige­rian econ­omy.

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