Dr Ngozi Okonjo-Iweala, Nigeria’s Finance Minister, did not dispute the assertion of World Bank President Jim Kim, that Nigeria was among the world’s extremely poor countries, but only offered an explanation.
She explained that the ranking was based on large population of the poor in the country and not on the level of development.
The minister said the phenomenon of large number of the poor is peculiar to middle-income countries such as Nigeria.
To give credibility to her explanation, on April 6, 2014, Nigeria became the largest economy in Africa and 26th largest economy in the world based on an 89.22 per cent growth in Gross Domestic Product (GDP).
Economists note that GDP indicates the market value of all officially recognised final goods and services produced within a country in a year, or over a given period of time.
According to them, the GDP per capita is often considered an indicator of a country’s standard of living.
They opine that in spite of Kim’s observation, it is reported that Nigeria’s economy is currently worth 510 billion dollars.
Available records from the National Bureau of Statistics also indicate that the latest GDP estimate is N80.2 trillion or 509.9 billion dollars.
Observers note that the boost in the GDP is attributable to the emergence of new economic activities, particularly the growing services sector, such as telecommunications, banking and entertainment.
With improved GDP, the question is, what will be the benefits to the masses, especially in their standard of living?
According to Okonjo-Iweala, the rebasing would not make the challenges of poverty and unemployment to disappear overnight, but it is important for policy making.
“The knowledge derived would help us to make better policies to grow the economy and create jobs for young Nigerians.
“Becoming the largest economy on the continent is a positive development, but it is not the destination,’’ she said.
Okonjo-Iweala said the GDP estimates would also help Nigerians, particularly the policy makers, to have better understanding of the structure and changes of the economy to serve as tools for economic growth.
Explaining the benefits of the GDP rebasing, Mr Johnson Chukwu, the Chief Executive Officer of Cowery Asset Management Company, noted that it would attract new investors to Nigeria.
Chukwu, a finance expert, however, advised that the country’s new economic status should compel the stakeholders to seek more investments to sustain the growth.
“Since there are immense potential in the country, the government should entice investors with friendly agricultural programmes to enhance mechanised farming.
“The policy will make it possible for them to access land, credit facilities and farm machinery with ease.
“The government will benefit through taxes and the creation of employment opportunities for young Nigerians,’’ he said.
Sharing a similar sentiment, Mr Carlos Lopes, the Executive Secretary, UN Economic Commission for Africa (ECA), said the development had placed the country in another economic perspective.
“Nigeria’s new GDP has important implications for the rest of the continent; it raises the question whether there are other African economies with a systematically underestimated GDP,’’ he said.
In his view, Mr Muda Yusuf, the Director-General, Lagos Chamber of Commerce and Industry, said with the rebasing, Nigeria’s economy had the capacity to reduce poverty.
But, Mr Nnaemeka Obiareari, Managing Director, Tarux Capital and Advisory Services, Lagos, disagreed with Yusuf, insisting that the rebasing had not shown any positive impact on the lives of the citizenry.
“Majority of our people are still not living a good life, and so people are bound to wonder what is in it for the masses.
“We are tired of government giving us improved economic indicators without it positively affecting our standards of living,’’ he said.
Corroborating Obiareari, Mr Lawrence Nweke, a business centre manager, said in spite of the impressive news about the country’s GDP, small scale businesses are still finding it difficult to thrive.
“We want to see these figures translate into energy, good roads and other infrastructural facilities.
“It is not enough for us to say that Nigeria has the largest economy in Africa, yet the people are suffering,’’ he said.
Dr Sule Magaji, Head, Department of Economics, University of Abuja, observed that the new GDP rating had thrown up many challenges to government.
He said Nigeria’s GDP growth was a good development that should translate to the economic development of the country, if the indices were adequately addressed.
“There are many indices of economic growth and development that should be addressed by government.
“These include improving the living standards of the people, embarking on mechanised agriculture, massive employment and ensuring the security of lives and property, among others,’’ he said.
Whatever yardstick is used in assessing the performance of any nation’s economy, observers insist that the assessment should reflect the true position of the welfare and security of the citizens.