Business

Calculating Nigeria's Correct GDP

At the reception of the Middleton Park Hotel in Cork City, Ireland, my eyes caught a curious liner in the Sunday Independent of June 1, 2014. The headline of the front-page article, bylined by one Sarah McCabe, read: “Sex and drugs to lift GDP figures”. According to the writer, the Central Statistics Office of Ireland was to follow in the footsteps of the United Kingdom, Estonia, Australia, Slovenia, Finland, Sweden and Norway in measuring earnings generated from cocaine deals and prostitution as part of Ireland’s Gross Domestic Product calculations. The addition of such illegal activities as cocaine dealings and prostitution, according to the article, could prove helpful to the meeting of European Union fiscal targets.

To an indolent mind, sexing data to pump up GDP figures is an example of how politicians lie with statistics. But a critical mind will see the ingenuity in such an expansion of the base of the estimates that make up a country’s GDP, as such illicit activities as smuggling, child trafficking, prostitution, drug trafficking and corrupt practices are part of the underbelly of every modern society. Indeed, if the purpose of measuring a country’s GDP is to determine the market or monetary value of all the finished goods and services produced within the country’s borders in a specific period, why leave out known or recognizable money-making activities simply because they are, at the moment, labelled illegal? It makes little sense to me. People who partake in prostitution earn and spend money. Hard drugs are not given to takers or addicts for free. These people spend money in buying the drugs just as the sellers — or dealers — earn money in selling them. Why complicate or distort the simple task of determining how much Nigerians, for instance, earn or spend in a given period by leaving out areas where money changes hands by the minute for the funny reasons that incomes from those areas are metaphorically branded as dirty money?

The figures from the UK statistics office underline the need to include such activities in the GDP measurement. For example, the records of the UK statistics office show that sex workers generated as much as £5.3bn while drug traffickers turned over £4.4bn. With due respect to the British people, the libido of the average Nigerian and our cultural permissiveness suggest that sex generates so much income in Nigeria, much more than the United Kingdom, if not more than the whole of the European Union combined.

Long before the politics of rebasing, I had, in 2006, described prostitution as the most lucrative sector in Nigeria. I had, then, in the enthusiasm of an adventurous and futuristic mind, declared: “Yes, prostitution is illegal in Nigeria, but it is the most patronized business in the country.” It is one business that fills in the gap created by the neglect of the night life by the various governments in the country. As soon as normal, legal businesses close for the day, prostitution takes over, lasting till dawn. If only parents know where their children are getting their expensive clothes, shoes, jewelry, watches and telephone sets from, then they will join me in this discussion. The propensity of the average girl to prostitute is so high that I wonders whether there is something inherently promiscuous in the kind of food that our young girls eat these days. From their clothes to their gaits, they exude promiscuity. The so-called undergraduates are worse. They want everything modern and expensive and, yet, all they think they have to sell to satisfy their lust is their bodies.

The government has decided to turn a blind eye to this reality, and I dare say the government is missing the point, and losing unnecessarily: legalize prostitution and earn revenue that can turn around dying and decaying infrastructures and institutions. It is wrong for the government not to be involved in — or, at least, acknowledge — the commercial sex business considering the visibility of the business, its viability and its reputation as the singular venture turning the economic wheel at night. If government is taxing liquor and cigarette dealers, why exempt the sex industry from taxes?

If incomes generated from prostitution, illicit drugs, gambling, smuggling and, above all, corrupt practices had been added to Nigeria’s GDP, the true health or size of the country’s economy would have been known and proclaimed to the world.

I have been critical of President Goodluck Jonathan, but I must confess that the rebasing of the country’s GDP was a very smart, timely and strategic move. Nigeria had long been shortchanging itself by allowing South Africa to go around the globe parading itself as the biggest economy in Africa, which had made it easy for that country to attract foreign direct and portfolio investments. Coupled with its power surplus and world class infrastructure, it had been easy and convenient for South Africa to talk and breathe down on Nigeria on various matters, especially those pertaining to economy. With a stroke of the pen, President Jonathan went the whole nine yards in brushing South Africa — and, indeed, the rest of Africa — aside to claim Nigeria’s frontline economic space.

Besides the respectability that the new GDP has earned for our country, it is comforting to note that its instant impact has manifested in the way and manner it has been able to minimize the push-back effect of Boko Haram’s terror campaign, and give the world the necessary assurance that, in spite of the misfortune of terrorism, Nigeria remains the preferred business and investment destination in Africa. This clean bill of health is sure to translate, in the near future, to more investments, increase in employment, more production, more voluminous consumption, increase in revenues and robust GDP.

The rebased GDP has beckoned investors to areas and sectors outside the oil industry, and I am hopeful that in a not-so-distant future, sectors like the entertainment industry will attract sufficient corporate investment capable of ushering it into the mainstream of global multibillion-dollar entertainment industry. I am also positive and definite about the influx of foreign investment in agriculture, agro-allied and extractive industries.

It is also certain that the rebased GDP will enable us borrow and spend more. My only reservation is the fear that such spending and borrowing may not be directed at accelerated infrastructural development and erection of an enduring groundwork for a manufacturing revolution.

At any rate, it is expedient for the Federal Government to put the last touches on the good job it has done by rebasing the rebased GDP, covering all money-making activities — not excluding, of course, prostitution, drug trafficking and smuggling.

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