On 7 April, Nigeria’s GDP ballooned by 89 percent to a new estimateof $509.9bn after the country rebased its economy for the first time in 24 years. The new number makes Nigeria largest economy in Africa, and the 26th largest in the world. But in the case of Nigeria’s dramatic jump, the story of what rebasing the country’s GDP tells us – and does not – about the economic fortunes of the world’s newest middle income nation is far more complicated than a straightforward narrative of growth.
The World Bank recommends that countries rebase their GDP data every three to five years, Nigeria failed to do so since 1990. This does not mean Nigeria has not produced national statistics since then; rather, that the datasets on which these calculations have been made up until now were significantly out of date. Nigerian statistics were known to be so unreliable that the country’s own central bank used to use its own data rather than rely on those produced by the national bureau of statistics.
Despite a history of inaccuracy, Nigeria’s new GDP data has been readily accepted by international economic and financial communities – and, though imperfect, it does tell us more than we knew before.
“If I had to choose between the 1990 base year data and 2010 base year data [used to calculate the 2014 rebase], I go with with the 2010 data – and that is what everyone is doing,” says Morten Jerven, a leading expert on African development statistics and a professor at Simon Fraser University. “It is a better number, that doesn’t say it is a perfect one.”
While the new base numbers also drop Nigeria’s debt-to-GDP ratio from 19 to 11 percent, this will not change Nigeria’s borrowing capacity as some predicted, explains Razia Khan, Africa economist at Standard Chartered. “Unless NIgeria has access to new streams of income, repayment capacity will not alter dramatically at all,” she says.
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By Adrienne Klasa
April 22, 2014