Nigeria’s economy nearly doubled in size on Sunday, easily passing South Africa to become the continent’s largest. But the massive growth was not based in the country’s oil wealth, improvements in telecommunications and transportation infrastructure, expansion of agricultural production, or any of the other factors that typically accompany development. Rather, Nigeria’s growth merely occurred on paper.
Nigeria’s National Bureau of Statistics concluded a long process of evaluating historical data, leading the country to rebase figures on which annual economic growth data is based. Nigeria’s gross domestic product (GDP) figures had been based on extrapolations from figures nearly 25 years old. In other words, the figure was rooted in estimates based on figures that predated the rise of mobile phones, the Nigerian movie industry (Nollywood), the current era of globalization, and a host of other developments that have occurred in the last quarter century.
When the dust settled, Nigeria had officially transitioned from being a “low income” to being a “middle income” country, and the country’s gross domestic product grew to $510 billion.
But there’s an interesting shell game going on here as well. While the new figures undoubtedly present a more accurate picture of Nigeria’s economy, nothing changed for Nigerians when the economy was rebased. The country still faced the same problems. Millions of people still lacked access to basic services. And the country’s per capita GDP still remained very low. Yet in rebasing their GDP, Nigeria’s leaders can present a more positive picture and can claim the title of Africa’s largest economy…at least on paper.