Analyst Reacts as Tinubu's Govt Moves to Include Illegal Activities in GDP Calculation
- The National Bureau of Statistics (NBS) announced plans to include illicit activities like pr0stitution and drug sales in Nigeria's GDP calculation
- Political analyst Hamma Hayatu condemned the move as an attempt to inflate economic statistics, likening it to legitimizing criminal activities in the economy
- Hayatu also opposed VAT increases, stressing the need for policies that alleviate economic hardship rather than superficial adjustments to GDP metrics
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FCT, Abuja - The Nigerian government is under scrutiny after the National Bureau of Statistics (NBS) revealed plans to include illicit activities, including pr0stitution and drug sales, in the country’s Gross Domestic Product (GDP) calculations.
The NBS disclosed the reforms at a sensitisation workshop organized in collaboration with the Nigerian Economic Summit Group (NESG).
Source: Twitter
According to NBS, the move aligns with global best practices and aims to provide a more comprehensive picture of Nigeria's economic 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."
The bureau also proposed 2019 as the new GDP base year, citing economic stability before the COVID-19 pandemic and subsequent policy disruptions.
The updated GDP framework is expected to incorporate emerging sectors, such as the digital economy, modular refineries, and domestic household operations, as employers of labour.
Analyst condemns the proposal
The announcement sparked criticism, with Hamma Hayatu, a political analyst, who spoke with Legit.ng on Saturday, January 18, lambasting the move as a misguided attempt to inflate economic growth statistics.
"Shame. In the quest to engineer fake GDP growth, they want to include illicit drugs and pr0stitution into GDP calculation. At this rate, they may include armed robbery, kidnapping, and terrorism as part of the economy," Hayatu said.
Furthermore, Hayatu also criticized the federal government's approach to tax reforms, emphasizing the importance of rejecting proposals to increase the Value Added Tax (VAT).
"An increase in VAT means higher prices for goods and services, affecting everyone nationwide at a time when we need economic relief.
"At a time when Nigerians are grappling with economic hardship, the government must focus on meaningful reforms rather than cosmetic changes to statistical measurements," Hayatu added.
Sectors that drove 2024 GDP growth
In related news, Legit.ng reported the top six sectors that drove Nigeria's GDP growth in 2024.
According to the NBS GDP report, the Nigerian economy grew by 3.46% (year-on-year) in real terms, with an estimated value of N20.12 trillion.
The growth rate was higher than in 2023, with the non-oil sector leading the way and the Services sector topping the chart.
The manufacturing sector was not among the top performers due to several challenges that plagued the industry in 2024.
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Source: Legit.ng
