What Our People Will Gain From Rebasing The GDP

•Ngozi Okonjo-Iweala

•Ngozi Okonjo-Iweala, Finance Minister

Ngozi Okonjo-Iwaela, Finance Minister, in this interview with RayPower FM, reacts to criticism of the rebasing exercise

Many Nigerians want to know what the rebasing is all about…

What the GDP measuremnet means is that you know we have statistics to get better data and information on the perfomance of our economy. All the activities already exist, it is just that we were not able to capture them because, for the past two to four years, we didn’t properly measure all the activities in the economy.

•Ngozi Okonjo-Iweala
•Ngozi Okonjo-Iweala

For instance, all those film industries were not captured, most of the informal sector was not captured, even the telcommunication, all the mobile phones and all the ecomonic activities were not captured.

Now we know the structure of the economy, we see that the economy is more diversified than it was, meaning that we have more sevices. Small and meduim enterprises were much more important than we thought. Agriculture is still important, industry is still about the same.

But under industry, there are some manufacturing activites that require being pushed more, for example, trying to put policies that will support the area of plastic, paper products, areas that we had not been paying attention to then. Also for the micro, medium and small enterprises, we need to put more policies in aspects of finance, skilled training.

Now, government policies that will support the sectors that are growing will become clearer. But what it shows to Nigerians is that this issue of diversification of the economy is really working and we should put more efforts in that direction.

Many people are asking, how does this impact on the ordinary person?  Critics wave these figure off as mere paper measurements, based on foreign theories. In other words, Nigerian cannot feel the size of the economy…

This will help put in place policies that will improve the lives of the common people. Just because we have a larger economy does not mean that overnight, things have changed. Now government has better information.

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In fact, this is what people have used to measure their economies worldwide. It is just that Nigeria has not been able to do that for 24 years. Now, for the private sector, this is a very big move. What it means is that foreign investors would be more attracted to the Nigerian economy. So, our domestic investors now know the size the economy and they can create more jobs.

Also, this rebasing shows that we have a strong consumer base. Also what this will do is to help us better build a safety net for those at the buttom end of the ladder so that they can also make some  gain out of this economy, better than they were making before. We have ongoing programmes that we can improve. You know those programmes, these people who are involved in SURE-P, how do we use vocational schools to train them so that they can also become useful to themselves? How do we support those who are enterpreneurs? We support them so that they can employ other people.

These are all things for the private sector. This is a very good thing and we are hoping that industry will see this as a signal to create more jobs and that is why we will target some sectors where there is potential for employment. But government needs to do more to encourage them.

Now, the rebase is supposed to be done every five years and the last one we did, as you said, was in 1990. Why did we wait till now and what efforts are we going to make to ensure that in the next five years we will not follow the past trend. Some critics outside Nigeria seem to be expressing doubt over the credibility of our current rebasing. What is your response?

The international community that validated this number was there  when we declared the numbers. Let me tell you the way it works internationally. The measures, the modern techniques, are all managed by the international institutions, the International Monetry Fund, IMF, the World Bank and Organisation for Economic Co-operation and Developmen, OECD. It is what every economy is measured on. We had these people working with us to ensure policy control.

For three months, we first invited our own Nigerian experts to look at the figures. People like Professor Olu Ajakaiye, the Nigerian Economic Society, Ayo Teriba, Akpan Ekpo and other professors, about six of them, who looked at the figures because we had to make sure what our internal experts were doing first. After they looked at them, the international community was invited to do quality control for three months. Even during the computation  of the figures, just like they do in other countries, the IMF identified a consultant to work with us. They did that in Ghana, they did that in all countries of the world. They were there validating the figures. For three months, we had quality check.

 Why did we wait till now to rebase?

First of all, I think planning is very important. And you need statistics for planning. The office of statistics was really allowed to run down the capacity there. So, it has taken time to build it up. So, when you do this type of exercise, you really need strong capacity. And you know it was only two years ago the office was strengthened and we had people to embark on this difficult exercise.

…Published in TheNEWS magazine

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