NBS Says Drug Sales, Other Illegal Activities to Be Used in GDP Calculation
- Illegal activities like pr*stitution and drug sales will now be included in the nation's Gross Domestic Product, or GDP
- Additionally, NBS recommended 2019 as the new GDP base year and 2024 as the new base year for calculating inflation
- Illegal activities will be in accordance with national best practices, according to the head of national accounts at the NBS
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Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
The country's Gross Domestic Product, or GDP, will now take into account illicit and covert activities including pr*stitution and drug sales. This is according to a statement released by the National Bureau of Statistics, or NBS.
Source: Getty Images
NBS disclosed this at a sensitization workshop on GDP and Consumer Price Index, CPI Rebasing organised in collaboration with the Nigerian Economic Summit Group (NESG).
NBS also suggested 2024 as the new base year for calculating inflation and 2019 as the new GDP base year.
According to the bureau, 2019 was proposed as the new GDP base year because economic activities were relatively stable during the year, compared to subsequent years disrupted by the impact of COVID and policy shifts
The bureau further stated that the rebased GDP is anticipated to include new sectors, including the digital economy, the operations of pension fund administrators, the Nigerian Social Insurance Trust Fund (NSTIF), the National Health Insurance Scheme (NHIS), modular refineries, domestic households as employers of labor, and coverage of illicit and covert activities.
Dr. Baba Madu, Head of National Accounts at NBS, explained the inclusion of illicit and covert activities in the classification of economic activities for the purpose of calculating GDP.
He said,
"Illegal activities will be in line with the national best practices, that is System of National Accounts, SNA 2008."
“If you are into, for instance, drugs, there are some countries, it is this drug that is driving their economy. It is illegal here because there is no legal backing. Also pr*stitution, they also earn income. Some even live bigger than those in the formal sector. The SNA does not say no to these, it is we. But the challenge is the legal backing and how do we get the data.
“And then, of course, the hidden economy. If I ask you, how much do you earn in a month, you will lower your income. Or if somebody is selling provision in a store, and before you know it he started selling India hemp. Those are the things we are seeing. There are challenges all over the world. But the beauty is that they are less than 3.0 to 3.5% of the GDP.”
Highlighting the importance of the GDP and CPI rebasing exercise, Statistician General, Prince Adeyemi Adeniran, said:
“The rebasing is a vital exercise that ensures our economic indicators are current and accurate reflections of the economic realities on the ground. As economies evolve, new industries emerge, and consumption patterns shift, it becomes imperative to update our statistical measures to capture these changes. Rebasing our GDP and CPI allows us to align with these transformations, providing a more precise and relevant picture of Nigeria’s economic landscape.
NBS fails to restore website
Legit.ng reported that after the country's statistics agency closed its website due to a cyberattack, important data on the Nigerian economy is still unavailable, over three weeks later.
Key economic indicators for Africa's largest oil producer are easily accessible online through the National Bureau of Statistics website.
On December 18, the agency shut down the website and cautioned users not to use any information found there until it was completely restored.
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Source: Legit.ng
