PANAPRESS
Panafrican News Agency
Ethiopia: Nigeria's substantial wealth shows Africa's GDP seriously downplayed
Addis Ababa, Ethiopia (PANA) - Nigeria’s economic recalculation has significant implications for African economies and may be a pointer to the under-evaluation of the Gross Domestic Product (GDP) in several others, the UN Economic Commission for Africa (ECA) said Thursday.
Nigeria emerged as Africa’s largest economy by re-calculating data gathered from the national accounts and using it to recalculate the GDP. The result showed Nigeria’s economy nearly doubled, making it the world’s 26th largest economy.
Carlos Lopes, the ECA Executive Secretary, said the upward revision of Nigeria’s GDP has significant implications at the country level.
Nigerian National Bureau of Statistics (NBS) showed the economy shot up to US$ 509.9 billion, 89% higher than the previous figure for 2013.
The figure was based on the Central Bank of Nigeria’s average exchange rate for 2013. The revision also resulted into a new per capita income which also increased to US$ 2,689 from US$ 1,555. Nigeria’s debt to GDP ratio also dropped from 19% to 11%.
“The improved quality of the data more broadly captures the size and structure of the Nigerian economy,” Lopes said. “Nigeria’s new GDP has important implications for the rest of the continent. It raises the question whether there are other African economies with a systematically underestimated GDP.”
Nigeria applied the 2008 System of National Accounts, which means the prices used in the recalculating the prices of goods and services were much more accurate and representative of the economy.
It also took into consideration a wider basket of products and activities which are considered when national accounts are calculated.
"As shown by Nigeria’s case, it is crucial for African countries to regularly rebase and re-benchmark their GDP figures, considering current lists in the basket of products and activities that better capture the size, structure, and trends of economy,” Lopes said in a statement.
The ECA is asking countries to use the same classification and methodologies for better cross-country comparisons and regional integration.
The increase in GDP is attributed to the emergence of new economic activities, particularly the growing services sector including telecommunications, banking and entertainment services.
In general, the share of services in GDP has significantly increased from 29% to 52%. A more diverse economy and a strengthening consumer base are expected to attract more foreign direct investment.
NBS availed all the data and methodological bases for the figures. The ECA said this shows the maturity of the Nigerian statistical system, which is a foundation for good governance and sound policy and decision-making.
African Centre for Statistics, based at the ECA, says survey conducted in January 2014 showed seven African countries still base their economies on figures released in 1990 or earlier years, while 10 countries have base years between 1991 and 2000, and further 19 have base years between 2001 and 2005.
Dozie Ezigbalike, Head of ECA’s Statistics Centre, said on the system of national accounts, only nine African countries are reported to have partially or wholly adopted the new system of accounts, while the others are still using older versions.
“This suggests that the real size of many African economies is likely to be larger than their current estimates. It also suggests that as a whole, the role of the African continent in the global economy might have been underestimated.”
-0- PANA AO/VAO 17April2014
Nigeria emerged as Africa’s largest economy by re-calculating data gathered from the national accounts and using it to recalculate the GDP. The result showed Nigeria’s economy nearly doubled, making it the world’s 26th largest economy.
Carlos Lopes, the ECA Executive Secretary, said the upward revision of Nigeria’s GDP has significant implications at the country level.
Nigerian National Bureau of Statistics (NBS) showed the economy shot up to US$ 509.9 billion, 89% higher than the previous figure for 2013.
The figure was based on the Central Bank of Nigeria’s average exchange rate for 2013. The revision also resulted into a new per capita income which also increased to US$ 2,689 from US$ 1,555. Nigeria’s debt to GDP ratio also dropped from 19% to 11%.
“The improved quality of the data more broadly captures the size and structure of the Nigerian economy,” Lopes said. “Nigeria’s new GDP has important implications for the rest of the continent. It raises the question whether there are other African economies with a systematically underestimated GDP.”
Nigeria applied the 2008 System of National Accounts, which means the prices used in the recalculating the prices of goods and services were much more accurate and representative of the economy.
It also took into consideration a wider basket of products and activities which are considered when national accounts are calculated.
"As shown by Nigeria’s case, it is crucial for African countries to regularly rebase and re-benchmark their GDP figures, considering current lists in the basket of products and activities that better capture the size, structure, and trends of economy,” Lopes said in a statement.
The ECA is asking countries to use the same classification and methodologies for better cross-country comparisons and regional integration.
The increase in GDP is attributed to the emergence of new economic activities, particularly the growing services sector including telecommunications, banking and entertainment services.
In general, the share of services in GDP has significantly increased from 29% to 52%. A more diverse economy and a strengthening consumer base are expected to attract more foreign direct investment.
NBS availed all the data and methodological bases for the figures. The ECA said this shows the maturity of the Nigerian statistical system, which is a foundation for good governance and sound policy and decision-making.
African Centre for Statistics, based at the ECA, says survey conducted in January 2014 showed seven African countries still base their economies on figures released in 1990 or earlier years, while 10 countries have base years between 1991 and 2000, and further 19 have base years between 2001 and 2005.
Dozie Ezigbalike, Head of ECA’s Statistics Centre, said on the system of national accounts, only nine African countries are reported to have partially or wholly adopted the new system of accounts, while the others are still using older versions.
“This suggests that the real size of many African economies is likely to be larger than their current estimates. It also suggests that as a whole, the role of the African continent in the global economy might have been underestimated.”
-0- PANA AO/VAO 17April2014
