GDP rebasing is no guarantee for economic expansion - Kale

Dr. Yemi Kale, Statistician-General of the Federation

The Statistician-General of the Federation (SGF), Mr. Yemi Kale has said the proposed rebasing of the country’s gross domestic product (GDP) is not a guaranty that the economy would expand.

Kale who spoke  at a one-day sensitisation workshop on Nigeria's GDP Rebasing, argued that developments over the past 23 years since the existing "base year" was established suggested that the GDP could significantly appreciate when the rebasing is completed.

“We did a survey of about 40 other countries, in some countries like Ghana it went up to about 50 per cent, some 10 per cent and some actually went down. So we do not know whether it's going to go up or down at this point."

He also disclosed that a tentative rebasing estimate would be provided in December because "all the things we needed for it to work out are now in our control," he explained.

Kale added: "Well, we have released our tentative time-table for the rebasing in December. Maybe we can now get the stakeholders to supply the data we need.
"We feel confident that with the support of different stakeholders, we'll be ready by December. By then, we'll have preliminary estimates of the rebased GDP and by next year, we'll now have the final detail. But the difference between the final and preliminary are not supposed to be different. By December, we'll have preliminary estimates you can work on."

Kale, who  described rebasing as an act of changing the current base year to reflect current reality in terms of economic activities, noted that “rebasing as a statistical activity could be summed up as the updating of the GDP computation framework using new data sources, definitions and methods.”

Also speaking at the occasion, the Minister of National Planning Commission (NPC), Dr. Shamsuddeen Usman ,pointed out that contrary to widely held notion that the country's GDP growth had not impacted on the living condition of the populace, stating it did not necessarily have direct bearing with citizen's welfare and poverty reduction.

According to him,  there were visible constraints associated to the use of GDP alone in gauging welfare or development.

"For example, Nigeria's real GDP growth rate has averaged seven per cent since 2004, but poverty reduced by only two per cent during the same period, raising questions about the quality and sustainability of such growth, " he noted.

Usman added that though income growth which is determined by growth in GDP had been recognised as a pre-condition for poverty reduction, it basically underlined how the national income of a country was generated, who produces or earns it and what it is spent on.

The minister however said the GDP rebasing for the economy, would among other things, help measure changes which had occurred over time in order to give a more accurate estimation and attract foreign investment.

This, according to him, would also command international respect for the country and serve as a basis for future projection.

The minister said the federal government had expanded its financial support to the NBS in the last two years to improve on data generation and bring the rebasing project to fruition.

In his remarks, the Country Director, International Monetary Fund (IMF), Mr. Scott Rogers, advised the GDP rebasing exercise was not a process that should be rushed because it required tedious and huge amount of data.

He said the outcome of the exercise could be difficult to determine as it could either reveal a contraction or expansion of the economy.

He said the NBS must not be blamed for whatever outcome the study reveals, adding it was just an improvement on how to measure the economy.
Rogers said IMF would continue to support the NBS to make the exercise a success.
- Thisday