Fact is fact: Our Re-Based GDP Should not be Debased by Cynicism - Aluko

We can be skeptical, but we should not let cynicism debase the recent re-basing of our GDP.

Fact is fact - GDP is measured in LOCAL CURRENCY - and it is now stated as N80.3 trillion for 2013 with a 2010 base year instead of N42.4 trillion for the same year at 1990 base - but whether  that is $510 billion (the oft-quoted new GDP, based on $1 = N157.5), or  $486.7 billion ($1 = N165) or $472.4 billion ($1 = N170), it shows only three things:

1.  new types of goods and services have been added since 1990 (the previous base year);  some or all of the retained goods and services have INCREASED quantities of them produced AND/OR are sold at higher prices;  why is this so difficult to believe that all of that will amount to a HIGHER GDP?

2.  if the re-based GDP is accepted, we have JUMPED over South Africa (at 370.3 billion)  to be the largest economy in Africa BASED ON GDP alone - and no other index for now;

3.  Our GDP per capita is now increased to  N533,333 (if our population is 150 million);  N501,875 (if 160 million) and N473,353 (if 170 million).  You will have to divide those numbers by 157.5 or 165 or 170 to determine the US dollar equivalent of our GDP per capita.

4.  Mathematically, in general,  EVERY calculation in which the GDP is the numerator (eg GDP per capita) will look better;  every calculation in which the GDP eg expenditure on education as a function of GDP,  average income per GDP etc.)  is in the denominator will in general with look worse.  So on balance, this information is a wash, in fact less salutary - but truth is truth, and I do not see how anyone can gain from this new information as an election gimmick.

Let me repeat: we can be skeptical, but we should not let cynicism debase the recemt re-basing of our GDP.

And there you have it.

Bolaji Aluko (PhD)