In a controversial move that has drawn mixed reactions, the National Bureau of Statistics (NBS) announced plans to include illegal and hidden activities, such as drug trafficking and prostitution, in the calculation of Nigeria’s Gross Domestic Product (GDP).
This decision, announced at a sensitization workshop organized in collaboration with the Nigerian Economic Summit Group (NESG), has sparked widespread debate, with critics accusing the agency of attempting to whitewash the current administration’s economic performance.
The rebasing exercise, which also proposes 2019 as the new GDP base year and 2024 as the new base year for Consumer Price Index (CPI) computation, is said to align Nigeria’s economic metrics with global best practices. The Statistician-General of the Federation, Prince Adeyemi Adeniran, described the move as vital to ensure that the country’s economic indicators reflect current realities.
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Global Standards or Local Politics?
The inclusion of illegal and hidden activities in GDP computation is in line with the System of National Accounts (SNA) 2008, a global framework that recommends capturing all economic activities, regardless of their legality, to provide a comprehensive picture of an economy.
Dr. Baba Madu, Head of National Accounts at the NBS, explained the rationale behind the move: “If you are into, for instance, drugs, there are some countries, it is this drug that is driving their economy. It is illegal here because there is no legal backing. Also, prostitution. They also earn income. Some even live bigger than those in the formal sector. The SNA does not say no to these, it is we. But the challenge is the legal backing and how we get the data.
“And then, of course, the hidden economy. If I ask you, how much do you earn in a month, you will lower your income. Or if somebody is selling provision in a store, and before you know it he started selling India hemp. Those are the things we are seeing. There are challenges all over the world. But the beauty is that they are less than 3.0 to 3.5% of the GDP,” he said.
Dr. Tayo Aduloju, Chief Executive Officer of NESG, highlighted the potential benefits of GDP rebasing, such as improving Nigeria’s creditworthiness and attracting foreign investment. However, he cautioned that credibility is key.
“Accurate data enhances credibility. Our debt-to-GDP ratio, a critical indicator of fiscal health, dropped from 19% to 11% after the 2014 rebasing,” he said.
“This improved Nigeria’s creditworthiness, making us a more attractive destination for foreign direct investment. Investors are drawn to transparency and growth potential, and rebasing sends a clear message: we understand our economy, and we are open for business.
“Second, rebasing sharpens policymaking. It provides a detailed map of our economic terrain, enabling governments to identify high-growth sectors for scaling and low-growth sectors that require targeted interventions to drive impactful and balanced development. For example, after Ghana’s 2010 rebasing—which resulted in a 60% GDP increase—its policymakers could better plan for infrastructure and social investments, fueling sustained growth.”
However, the timing and approach of the initiative have fueled suspicions about its underlying motives.
Accusations of Whitewashing
Observers argue that the inclusion of illegal activities in GDP calculation is part of an ongoing effort by the agency to portray the government in a favorable light, even at the expense of statistical integrity. This isn’t the first time the NBS has come under scrutiny.
Last year, the agency faced criticism when it revised its definition of employment in a manner that included anyone who worked for at least one hour per week and received compensation. This change, seen as an attempt to downplay Nigeria’s unemployment crisis, was widely criticized by economists and policy experts, who warned that such manipulations could undermine effective policymaking. They warned that without accurate data, the government risks implementing policies that fail to address the country’s real economic challenges.
The NBS has also reportedly been under immense pressure from the current administration to alter data in ways that paint a rosier picture of the country’s economic and security situation. A striking example of this came after the agency published a damning report on Nigeria’s worsening security challenges. The report led to the head of the NBS being summoned by the Nigerian secret service, raising concerns about political interference in the agency’s operations.
Shortly after, the NBS claimed its website had been hacked—a development many saw as an attempt to deflect attention from the controversy surrounding its findings. The website has remained inaccessible for months, further eroding public confidence in the agency’s transparency.
Against this backdrop, the NBS faces a growing trust deficit among Nigerians. The agency’s past controversies, coupled with suspicions of political influence, have cast a shadow over its latest initiatives.