"Data Expose Gaps In Nigeria\u2019s $1 Trillion GDP Target"

" Data Expose Gaps In Nigeria\u2019s $1 Trillion GDP Target \r\n\r\nRecent data from the National Bureau of Statistics (NBS) show that Nigeria\u2019s gross domestic product (GDP) plummeted in dollar terms by a staggering 52.63 percent nominally between 2023 and 2024 (first to third quarters), using prevailing exchange rates in those periods.\r\n\r\nThe average exchange rate in the first three quarters of 2023 was N580.96\/$, while that of 2024 was N1427.73\/$. The cumulative nominal GDP for 2023 (Q1-Q3) was N164 trillion, while that of 2024 was N190.92 trillion in the same quarters (Q1-Q3).\r\n\r\nBusinessDay\u2019s analysis shows a GDP decline of over 50 percent within the period. The GDP of the first three quarters was $282 billion in 2023, and that of 2024 stood at $134 billion.\r\n\r\n Nigeria\u2019s nominal GDP has been shrinking in dollar terms \r\n\r\nThis sharp decline, largely driven by currency devaluation, seriously jeopardises the government\u2019s ambition of achieving a $1 trillion economy.\r\n\r\nPresident Tinubu, however, remains optimistic. On 25 November 2024, the NBS announced a GDP growth rate of 3.46 percent, a figure the administration has seized upon as a sign of progress. According to Sunday Dare, his special adviser on media and public communications, this growth underscores the President\u2019s commitment to a robust economy and improved living standards for Nigerians.\r\n\r\nYet, a closer examination reveals a more subtle story\u2014one that can be likened to the tale of two students and two economies.\r\n\r\nOne student, initially scoring 40 percent, improved to 44 percent, representing a 10 percent increase. Despite this growth, the student remained in the \u2018Pass\u2019 category, with no significant change in status.\r\n\r\nMeanwhile, another student, who started at 65 percent, improved to 70 percent\u2014a smaller increase of 7.69 percent. However, this was sufficient to elevate the student from \u2018Good\u2019 to \u2018Excellent,\u2019 fundamentally altering their academic standing.\r\n\r\nA similar comparison can be drawn between Argentina and South Korea.\r\n\r\nIn the early 20th century, Argentina ranked among the world\u2019s wealthiest nations. Between 2003 and 2008, it achieved an average annual GDP growth rate of 18 percent, driven by a global commodity boom and strong domestic demand. By 2011, its economy reached $530 billion. However, this growth was unsustainable. By 2020, Argentina\u2019s GDP had contracted to $385 billion, according to the World Bank\u2014a decline of over 27 percent within a decade. Inflation, debt crises, and political instability kept Argentina trapped in the middle-income cycle, much like the student who improved their score but remained in the same grade.\r\n\r\nIn contrast, South Korea\u2019s economic trajectory has been less dramatic but far more consistent. Between 2000 and 2014, South Korea\u2019s economy grew at an average annual rate of four to six percent. Its GDP rose from $576 billion in 2000 to $1.4 trillion in 2014. By 2024, it had surpassed $1.8 trillion, underpinned by investments in technology, infrastructure, and industrial development.\r\n\r\nSouth Korea\u2019s steady growth, though numerically lower than Argentina\u2019s during certain periods, transformed its economy from a low-income to a high-income status\u2014much like the student whose modest percentage increase led to a significant change in standing.\r\n\r\nBoth countries experienced growth, but only South Korea\u2019s was transformative. Argentina, despite periods of high growth, remained economically stagnant due to a lack of structural reform and sustainability.\r\n\r\n Increasing at a decreasing rate \r\n\r\nSince Nigeria\u2019s last GDP rebasing in 2014, the economy has been increasing at a decreasing rate. In 2014, the country\u2019s GDP stood at over $570 billion. By 2024, this figure had depleted by 77 percent, falling to a mere $134 billion (Q1-Q3, 2024) after the NBS report.\r\n\r\nThe devaluation excuse fails to hold water, especially given the government\u2019s trillion-dollar ambition. Devaluation aside, achieving sustainable growth requires more than statistical adjustments.\r\n\r\nRecent findings from the General Household Survey (GHS) highlight a stark contrast between GDP growth and the reality faced by ordinary Nigerians. About 65.8 percent of households reported being unable to afford healthy, nutritious, or preferred foods in the last 30 days due to lack of money.\r\n\r\nWhile GDP is growing and unemployment rates reported to have decreased, a significant portion of the population remains unable to meet basic nutritional needs. The survey further revealed that the proportion of households worried about food scarcity due to financial constraints has doubled from 36.9 percent in 2018\/2019 to 62.4 percent in 2024.\r\n\r\nIronically, 70 percent of those facing food insecurity are engaged in crop farming\u2014a sector meant to provide sustenance. This paints a troubling picture of an economy where high employment rates mask the reality of a large population of \u201cworking poor.\u201d\r\n\r\nYet, the administration remains focused on its $1 trillion target by 2030, with Sunday Dare reiterating President Tinubu\u2019s promise of economic transformation. According to Dare, GDP rebasing in early 2025 will \u201ccapture the dynamism and significant changes in various sectors,\u201d propelling Nigeria towards shared prosperity.\r\n\r\nHowever, this reliance on rebasing raises critical questions: How will a statistical boost in GDP translate into tangible improvements for Nigerians struggling to afford basic necessities? How will it address the structural challenges hindering inclusive growth?\r\n\r\n Process vs Result \r\n\r\nNigeria\u2019s approach exemplifies a common challenge among developing nations\u2014an excessive focus on outcomes while neglecting the process. As Ifueko Omoigui-Okauru, former executive chairman of the Federal Inland Revenue Service (FIRS), observed, \u201cIn developing a plan or a vision, sometimes people focus too much on the results and less on the process.\u201d\r\n\r\nRather than fixating on a trillion-dollar economy as an end goal, the federal government must communicate and prioritise the processes needed to achieve sustainable growth. Investments in education, infrastructure, healthcare, and institutional reforms are essential for creating an economy that benefits all Nigerians, not just a statistical figure.\r\n\r\nWithout a clear and inclusive process, the ambition of a $1 trillion economy risks being little more than a numerical illusion\u2014one that does little to improve the welfare of millions who still struggle to make ends meet.\r\n\r\n\u201cBesides, Nigeria would need to expand this economy by nearly nine times to achieve the $1 trillion target. We just had a growth rate of 3.46 percent in the third quarter, which is insufficient by any means,\u201d said Yakubu Ibrahim, economist and analyst at Economy Post, who noted that this translates by over 20 percent annual growth from 2024 to 2030.\r\n \r\n "

"Data Expose Gaps In Nigeria\u2019s $1 Trillion GDP Target"

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