08/04/2014
Telecommunications industry play a key role in growing Nigeria's economy.....
The National Bureau of Statistics (NBS) on Sunday published the result of Nigeria’s Gross Domestic Product (GDP) rebasing, showing that the economy, at $509.9 billion (N80.222 trillion) at the end of 2013, is today Africa’s biggest.
The result showed that Nigeria’s economy pushes the South Africa’s, at $370.3 billion at the end of 2013, to the second position.
The rebasing exercise also revealed that Nigeria’s GDP makes it the 26th largest economy in the world, according to Coordinating Minister of the Economy and Minister of Finance, Ngozi Okonjo-Iweala, who announced the figure at an interactive session.
A statement by the Federal Ministry of Finance said the rebasing shows that Nigeria’s economy is now far more diversified than previously thought, with new, previously uncaptured, sub-sectors.
The statement also listed major growth drivers as agriculture, which alone contributed 24 per cent, as against 30 per cent in the 1990 data, while the services industry (comprising telecommunications, Information Technology, airlines) emerged the biggest with 50 per cent contribution.
Between 2010 and 2013, according to the data, the nation’s GDP grew by $149.3 billion or 41.4 per cent and N26.018 trillion or 48 per cent within the period.
In the three-year period, the size of Nigeria’s economy stood at N54.204 trillion (about $360.6 billion) in 2010; rising to N63.258 trillion ($408.8 billion) the following year; and N71.186 trillion ($449.9 billion) in 2012.
The changes between the old and new rates, the statement added, “represent growth of 59.5 per cent in 2010; 69.13 per cent in 2011; 75.58 per cent in 2012; and 89.22 per cent in 2013 (forecast)”.
Reacting to the figure released, finance and economic analyst, and Managing Director of Lagos-based Financial Derivative Company Limited, Bismarck Rewane, in a chat with BBC described the revisions as “a vanity”.
For him, the figures mean nothing to the average Nigerian, even as its announcement will not make Nigerians “better off tomorrow. It doesn’t put more money in the bank, more food in their stomach. It changes nothing”.
While most countries do it at least every three or five years, Nigeria last updated the components in its GDP base year in 1990, when sectors like Nollywood was non-existent and the lone telecom operator could only boast of about 300,000 phone lines.
The Nigerian telecoms industry has remained one of the fastest growing for years now, since the 2001 revolution through new players with billions of dollars in investment and almost 150 million phone lines, mostly mobile to show for it.
Likewise, 24 years ago there was only one airline, and now there are many.
However, some economists pointed out that Nigeria’s economic output is underperforming because at 170 million people, its population is three times larger than South Africa’s.
Okonjo-Iweala said the rebasing exercise was not primarily to prove Nigeria’s economy is biggest in Africa.
Instead, she said, it was “to measure how much the economy has changed. And that is the outcome. Becoming the largest economy on the continent is a positive development, but it is not destination.
“The knowledge derived will help us make better policies to grow the economy and create jobs for young Nigerians.”
She stated “Nigerians have worked hard to make our economy the largest in Africa and they should be proud of the feat. But it is also a challenge and an opportunity.
“The results of the rebasing exercise will not make the challenges of poverty and unemployment disappear overnight, but the better understanding of the structure and changes of the economy will give us better tools to grow the economy and tackle poverty and unemployment.”
Even then, the minister said: “In response to the findings, the Federal Government is already re-strategising to take advantage of the opportunities provided by better knowledge of the changing structure of the economy.
“The policy direction will reflect even more the fact, like similar emerging market economies, that small and medium scale firms will increasingly play a more prominent role in the economy.
“As part of this focus, government will expand and deepen its current efforts to boost manufacturing, SMEs and entrepreneurship through relevant policies, skills training, grants and other incentives.
“This is likely to include scaling up of programmes like YOUWIN, the Graduate Internship Scheme and similar programmes.
“Another sector that will receive more attention is the Nigerian movie industry whose growth was also highlighted by the rebasing exercise. The industry accounts for N853.9 billion or 1.2 per cent of GDP (not N9 trillion as wrongly reported by some media.)
“To encourage sustainable entrepreneurship in the industry which is popularly known as Nollywood, tax breaks in specific areas are being considered as well as the building of a strong distribution network that will ensure that practitioners are not denied their just rewards due to the activities of pirates.
“Housing and construction, a sector which has the capacity to generate jobs and grow the economy, will also be a centre piece of future efforts,” Okonjo-Iweala added.
For Supervising Minister of the Ministry of National Planning, Bashir Yuguda, the exercise was credible, done rigorously and professionally executed by a team of local and international experts.
“It is a thorough job and we are pleased with the results. The results will empower government to do more for the Nigerian people,” he said.
The statement also noted that there has been a noticeable structural shift in the economy as can be seen by share of key sectors to the country’s overall GDP, including agriculture, which now accounts for 24 per cent, from 30 per cent of GDP in 1990.
The services industry now accounts for 50.2 per cent of GDP.
“The explanation for this is that even though agriculture is growing in terms of total value and jobs created, the rise in the contribution of service sectors such as telecommunications has led to a reduction of its contribution as a proportion of total GDP.
The implication is that Nigeria is moving towards a more services-oriented economy.
Under the new service industry structure, information and communication rank high, next to wholesale and retail trade.
“One area of good news uncovered by the rebasing exercise is the 26.7 per cent increase in the value-added on crop production, a 43.9 per cent in value added of livestock, a 9.2 per cent increase in the value added of fishery, and a 23.9 per cent increase in the value of forestry,” the statement added.
