CBN says Rebasing of GDP Essential for Economy

Kingsley MoghaluDeputy Governor, Central Bank of Nigeria (CBN), Financial System Stability, Dr. Kingsley Moghalu, has said the planned rebasing of the country’s Gross Domestic Product (GDP) is very necessary and helpful to the economy.
The National Bureau of Statistics (NBS) had indicated the rebasing would be done next year. The rebased GDP figures were initially meant to be released in January 2012, but were shifted to August 2012 following the petrol subsidy strike at the beginning of last year. Thereafter, it was extended to October and the new date is first quarter of 2014.
The GDP rebasing is expected to increase the estimated size of the Nigerian economy by 40 per cent, which would boost the economy from about $250 billion, to about $350 billion. That brings it very close to South Africa’s currently $385 billion economy. Specifically, the initiative is to change the base year for the country’s GDP computation from 1990 to 2008.
But Moghalu who spoke at a recent forum in Lagos, pointed out that although the exercise was necessary and helpful, Nigerians should not just put their hope on the figures that would come out from the exercise, “and begin to feel that we have arrived because our GDP now approximates that of South Africa. That would be a mirage.”
He insisted that there was need for everybody in the country, especially policy makers, to work towards improving the quality of life in the country, the country’s ranking in the Human Development Index, and reduce the poverty level which he put at about 60 per cent.
The central bank deputy governor added: “So those are the real things we need to work on. When we rebase our GDP, it becomes so huge, but it doesn’t mean that the infrastructure that I see in South Africa whenever I go there exists in Nigeria. It is creating those infrastructure here and not just having an absolute GDP figures that brings development.
“I agree that rebasing is essential because countries rebase their GDP every five years and at most, 10 years. But we haven’t done that in 20 years. Therefore our economic statistics are totally out of place as far GDP growth and output is concerned.
“What is happening is a healthy competition within African countries. The best way for Africa to grow is for countries to look at what their neighbours are doing. So in that context, it is not inappropriate for Nigeria to aspire to become a bigger economy than South Africa.”

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