The National Bureau of Statistics, NBS, yesterday said that illegal and hidden activities like prostitution and drugs peddling will now be included in the calculation of the country’s Gross Domestic Product, GDP.
In a report by Vanguard, the NBS has proposed 2019 as a new GDP base year and 2024 as new base year for inflation computation.
NBS disclosed this at a sensitization workshop on GDP and Consumer Price Index, CPI Rebasing organised in collaboration with the Nigerian Economic Summit Group (NESG).
According to the bureau, 2019 was proposed as the new GDP base year because economic activities were relatively stable during the year, compared to subsequent years disrupted by the impact of COVID and policy shifts..
The bureau added that the rebased GDP is expected to capture new segments such as the digital economy, activities of pension fund administrators, National Health Insurance Scheme (NHIS), Nigerian Social Insurance Trust Fund (NSTIF), activities of modular refineries, domestic households as employers of labour and coverage of illegal and hidden activities.
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Elaborating on the inclusion of illegal and hidden activities in the classification of economic activities for computation of the GDP, Head of National Accounts, NBS, Dr. Baba Madu, said: “Illegal activities will be in line with the national best practices, that is System of National Accounts, SNA 2008.
“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 do 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.”
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