Expert Explains Why NBS is Including Hidden and Illegal Activities in Rebased GDP
- The National Bureau of Statistics is including illegal and hidden activities in its rebased GDP to glean proper insights into those spaces
- Expert says that the NBS wants to be able to answer questions about the value and volume of financial transactions that take place in those industries
- The NBS is not a law enforcement agency, so, it has no decision over what will be done with the statistics provided
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
The latest announcement from the National Bureau of Statistics (NBS) that the Gross domestic product (GDP) calculation would be rebased attracted many reactions from Nigerians.
What seemed most concerning was the decision to include hidden and illegal activities like drug sales, s*x workers, and some other brow-raising activities among the GDP calculations.
Source: Getty Images
In a chat with Legit.ng, Mr. Ikemesit Effiong, Partner and Head of Research with SBM Intelligence, said that this move would help the NBS gather critical data from hidden activities.
He noted that countries around the world measure statistics and pool data from all industries, including those that raise eyebrows.
He pointed to the sexual wellness market in the USA, valued at $11 billion in 2022 and projected to grow to $20 billion in 2030. Also pr*stitution trade in the US is estimated to generate $14 billion annually.
Mr Effiong said;
“The NBS wants to be able to answer questions such as this. Even if you argue that this thing is a problem that you need to clamp down, it is good practice to understand the scale of the problem.”
NBS is not endorsing illegal activities
Mr Effiong explained further that NBS only measures statistics from data gathered, and its actions do not amount to a direct or subtle endorsement.
He explained;
"It stands to logic that illegal economic activities are still economic activities that sustain livelihoods. Excluding them from the national accounts means there's a grey economy that's not being captured by policymakers for national planning purposes."
He noted that whatever the relevant government agencies choose to do with the data, it is only within NBS's jurisdiction to get the data.
Rebased GDP includes illegal and Hidden activities
Recall a recent Legit.ng report where the National Bureau of Statistics (NBS) announced its intention to include new sectors and activities in its rebased GDP.
This was to include things like drug sales, domestic staff, mining, s*x workers, and more. According to the NBS statement, all of these would now be included in the GDP calculations, and the computations would be done in line with best practices.
The NBS also stated that 2019 would serve as the new GDP base year, while 2024 would be the base year for calculating inflation.
Experts commend PFA inclusion in rebased GDP
In the wake of varied reactions that trailed the decision to rebase GDP, experts in the pension and insurance space commended the NBS for including PFAs.
They noted that capturing the activities of PFAs in the GDP was long overdue and was very important to have a comprehensive picture of what goes on in Nigeria's financial sector.
They added that since the Pension Fund Administration was introduced in the early 2000s, the industry had recorded significant growth, which needs to be reflected in GDP calculations.
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Source: Legit.ng
