There are three kinds of lies: lies, damned lies and statistics.”
Mark Twain, 1835-1910, Vanguard Book Of Quotations, VBQ p 130
History does not repeat itself; Nigerian governments do.
Late in 2013, when Jonathan was more than half-way through his first four years term and he was becoming increasingly un popular, Dr Ngozi Okonjo-Iweala, the Federal Minister for Finance, and Coordinating Economic Minister, thought of a brilliant idea to boost the President’s popularity; and avert imminent defeat in the 2015 elections.
Rebasing the economy was the magic wand. Suddenly, Nigeria’s economy, which had hitherto been proclaimed smaller than that of South Africa, became the largest economy in Africa – on paper.
There was official jubilation, naturally. Nationwide, there was bewilderment.
Those who never visited South Africa, but, have seen the country on television could not comprehend how the biggest economy appeared so wretched by comparison with the nation it replaced by mere paperwork.
SA generated ten times more power; its education system is far superior; it is light years ahead in manufacturing, agriculture, technology, roads, air ports and seaports encouraged more tourism; health services are incomparable and it has better housing. Nigerians were still crawling into South Africa as illegal immigrants; while very few South Africans want to come here when FG officials were clinking glasses of champagne for the clever trick foisted on us.
Unknown to Okonjo-Iweala and Jonathan, Nigerians were not fooled. The joke was on the government.
People looked around them and discovered that nothing has changed. Their lives were still as dreadful as they were before rebasing. What was worse, there was no prospect of aggregate economic improvement in the future as a result of the meaningless and financially costly exercise. It was a waste of everybody’s time.
Fooling People With Dubious Statistics
“You can fool some of the people all the time; you can fool all the people some of the time; but, you can’t fool all the people all the time.”
US President Abraham Lincoln, 1809-1865, VBQ p 62.
The pathetic thing about the current attempt to rebase and give the appearance of progress rests in the fact that it is neither original nor good.
It is more like the same stale soup re-warmed and served in fancy new plates. Because inflation had risen embarrassingly to 34.8 per cent, there was an urgent need to reduce the figure – not by tacking the fundamental causes of inflation, but by changing the metrics for measurement.
That is intellectual dishonesty at its worst; and some of the ways by which the National Bureau of Statistics, NBS, has arrived at the new figures for GDP and inflation point to disturbing and dangerous directions.
Let us interrogate the new figures by drawing analogy from other aspects of life; specifically, measurement of temperatures.
Every secondary school pupil knows that water boil sat 100 degrees Celsius and 212 degrees Fahrenheit.
Two individuals, one armed with th eCelsius thermometer and the other the Fahren heit thermometer can pronounce the temperature of boiling water without being accused of dissembling.
The problem starts when the person formerly holding the Fahrenheits witches to Celsius and announced 100 degrees as boiling point – without revealing the change of metrics.
What the NBS has done amounts to fraudulent change of measurements.
The first and most obvious question is: if inflation has indeed dropped by ten points between December 2024 and January 2025, which products or services recorded significant drop in prices? Was it food, rent, transport, health services, electricity, import duties, port charges or communications?
As a consumer of almost all – except port charges, I can authoritatively state that no decline in price had been experienced anywhere.
Even the price of fuel which fell from N1,100 per litre in December to N995/1000 in January has not reduced aggregate transport costs by ten per cent.
Prospects And Problems Of Debasing
“Nothing is either good or bad, but, thinking makes it so.”
William Shakespeare, 1564-1616
Apart from the gimmickry attending there basing exercise, some of the new factors added to the computation of the Gross Domestic Product, GDP, have placed Nigeria in an ethical and economic dilemma.
The unprecedented decision to include income derived by individuals and investments made to realise there venue in computing GDP might beem balminga principle which might come to haunt us in the future.
Permit me to explain.
Shortly after Governor Fashola was elected, I had an appointment with him, at my request.
My Management Consultancy, jokingly called Uni Jankara, had conducted a study in seven Local Governments of Lagos State.
We discovered that close to 40 percent of “workers” in the private sector, in the state, were living on activities which were either absolutely or partially illegal.
That study prompted me to publish an articletitled :’Survival Of The Un fittest’.
Street trading was the most pervasive; followed by obstruction of roads and sidewalks, building kiosks on drainage systems, eating places established in unhygienic places, smuggling, prostitution, mechanic work shops blocking roads, touts at motor parks, illegal drug dealers etc.
In fact, forty five categories of criminal activities were identified from which people derive their income.
No part of Lagos was exempted from encroachment by Nigerians surviving on illegal activities.
Nothing less than twenty seven examples were going on within 200 meters radius of Lagos State Governors’ Mansion.
Lagos is not the only state experiencing the phenomenon.
All the 36 States and the Federal Capital Territory have tried without success to curb the activities of those operating in the invisible sector of the economy.
Almost invariably, no records are kept of their activities – expenditures and incomes basically.
For those in the most criminal sectors– smuggling, prostitution and illicit drugs– the less record the better.
Back in 2007, illicit drugs was a minor problem, banditry, kidnapping, money rituals, cyber crime sand yahoo were unknown. Today, they constitute a significant part of economic activities challenging economists and society to determine how to deal with them.
Traditional economics has mostly ignored those socially disruptive activities. But, as they increasingly stimulate investment, create jobs, generate revenue, help people to take care of their families and promote aggregate consumption, it is becoming more and more difficult to exclude them from calculation of GDP. That immediately raises the fundamental problem which, not only the Nigerian, but all governments must resolve.
The question now is this: is illicit drug production, importation, distribution and consumption a business? The same question can be asked about banditry, yahoo, cyber crime, prostitution. Should they be accorded the same pride of place as investment in a factory to produce food or are finery? Should government be promoting those activities; while at the same time setting up large organisations – NDLEA, NAFDAC, Nigeria Customs – to apprehend and punish those engaging in them?
The truth is: if indeed Nigeria’s economy has been rebased and is larger, after including new variables, then for honest comparative analysis, those variables would have to be estimated and included in previous years.
Otherwise, the current exercise will end up just as worthless as the first one. Specifically,, is banditry now officially recognised as a business?
Follow me on Facebook @ J Israel Biola.
Read the full article here
