Just as the general election knocks, both the political and corporate quarters have been set agog today with the release of the full report of Nigerian 2018 Gross Domestic Product (GDP) by Nigerian Bureau Statistics (NBS). A quick glance at the GDP data revealed that Nigerian GDP hits $417.1 billion in 2018, as against $375.8 billion in 2017. Invariably, this represented a 12.36% annual growth in nominal value, while in real term it grew at 1.93% in 2018 as against 0.82% in 2017. This suggests the Nigeria economy appears to be improving after the torrid recession it plunged into as a result of crash in global oil price.
Sectoral Contributions of GDP
In terms of key sectoral contribution to GDP, the service sector maintained the highest contribution to GDP with about 52.62% in 2018, as against 52.67% in 2017. This implies that the service sector although maintained highest contribution to GDP, but dropped by 0.05 which is traceable to the dip that occurred in the third quarter of service sector contribution to GDP. However, the agriculture sector slightly improved as the sector contribution improved from 25.08% in 2017 to 25.13% in 2018, a 0.05% increase. Lastly, there is no growth in the contribution of the industrial sector to GDP just as both 2017 and 2018 produced 22.25% each. Overall, the non-oil sector attributed 91.4% of the total GDP, while the oil sector controls a meager 8.60%.
GDP and Beyond?
Traditionally, the Gross Domestic Product is a measure of the market value of all goods and services produced in a period of time. Since it was introduced by Simon Kuznets for the US Congress in 1934, it has been adopted and regarded as the well-known measure of economic performance or progress with over 80 years pedigree. However, economic and political analysts have criticised the GDP figure due to its inability to incorporating well-being and sustainable development.
Also, GDP failure to incorporate wealth distribution, environmental depletion such as natural disasters, unpaid work, fighting crime and non-material welfarism such as happiness and so on. Against this background, GDP has been described as a misleading indicator with many flaws as a metric of welfare. Hence, if GDP must be taken seriously, then the human and natural assets used in producing it must be maintained and adequately addressed.
According to Nobel Memorial Prize winner in Economic Sciences and former chief economist of World Bank, Joseph Stiglitz,
“even the poor just like most citizens, care about security, political voice, jobs, etc.”
We can, therefore, conclude that ‘INCOME IS NOT EVERYTHING’. However, SHOULD WE THEN TOTALLY IGNORE GDP AND MOVE ON TO OTHER ECONOMIC INDICATORS? Definitely not! Both OECD and UNDP have been emphasizing well-being as a comprehensive measure of economic performance, yet, both GDP and well-being are mutually inclusive and should, therefore, be integrated together.
The Nigerian economy is bouncing back, GDP hits $417.1 billion in 2018, with both nominal and real growth rate at 12.36% and 1.93% respectively, and this should supposedly be applauded. However, these figures truly measure economic progress, but does not necessary translate to the wellbeing of the people. Hence, if Nigeria must be taken seriously with GDP figures, the country must rise and join the committee of nations to adopt both GDP and measures of wellferism as true indicators of economic progress.