Nigeria, Why Does Your Economic Reality Contradict Your On-Paper Statistics?

 The National Bureau of Statistics (NBS) recently released Nigeria's economic report for the last quarter of 2024. According to the report, there has been an improvement in the country's GDP, but the economic reality tells a different story.


In simple terms, a country's GDP (Gross Domestic Product) is like a scorecard showing how much money the country makes from goods (like oil, food, and manufacturing) and services (like exports, healthcare, and airlines). It’s a measure of how rich or poor a country is and how well its economy is performing. If a country's GDP is growing, it typically means the country is making more money.


But here’s the contradiction: in a country where inflation is over 35%, where the currency ranks among the weakest in Africa—if not the world—and where more than 65% of citizens live below the poverty line, how is robust GDP growth being calculated?


Between December 2023, when GDP growth was reported at 2.3%, and November 2024, when it supposedly increased to 3.6%, the prices of food and commodities have tripled. Meanwhile, Nigeria's manufacturing and agricultural sectors are in steep decline. Investors are leaving due to unfavorable economic policies, and farmers are being displaced by banditry.


I’m not an expert in economics, but I believe a country’s financial reports should align with the living realities of its citizens. In Nigeria's case, there’s a glaring disconnect.


The NBS seems to have reported nominal GDP, which doesn’t adjust for inflation. This can make GDP appear to grow simply because prices have risen, not because the economy is producing more. Real GDP, on the other hand, adjusts for inflation, reflecting true economic growth by comparing the value of goods and services at constant prices. The report claims to represent Real GDP, but the evidence suggests otherwise.


Debt also plays a critical role in economic growth. Yet, Nigeria is struggling on that front. As of the first quarter of 2024, the country’s domestic debt stood at 65 trillion Naira—53.95% of total public debt—while total debt reached 121.67 trillion Naira. Despite this staggering amount, there is little visible infrastructure or economic value to justify it.


Four major factors typically drive a country’s GDP, and Nigeria’s reality undermines the NBS report on each of these fronts:


1. Consumption (C): This represents what people spend on goods and services. In 2024, people’s purchasing power has been reduced to the barest minimum.



2. Investment (I): Many companies exited Nigeria between 2023 and 2024, reducing domestic investment opportunities.



3. Government Spending (G): Ideally, this includes spending on schools, roads, healthcare, and other public services. However, the current government seems more focused on maintaining a lavish lifestyle for the executive class and the National Assembly.



4. Net Exports (Exports - Imports): This is the value of goods a country sells to other nations minus what it buys from them. With declining productivity, Nigeria’s exports are struggling while imports continue to rise.




Ironically, inflation can make GDP figures look higher, but Real GDP removes the inflation effect to reveal actual economic progress. If the NBS is claiming to report Real GDP, then the contradictions in their figures suggest the report is misleading at best.


Olutoye Emmanuel. 

ayomayowa0624@gmail.com

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