Shock As NBS Unveils Why Prostitution, Other Illegal Activities Would Be Added In Nigeria’s GDP Calculation

The New Diplomat
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By Abiola Olawale

The National Bureau of Statistics (NBS) in Nigeria, Nigeria’s premier national data and research analytics agency has announced plans to incorporate hidden and inappropriate economic activities, such as prostitution and drug peddling, into the calculation of the country’s Gross Domestic Product (GDP).

The agency stated the move is part of a broader initiative to rebase Nigeria’s GDP and Consumer Price Index (CPI), with 2019 proposed as the new base year for GDP calculations and 2024 for inflation computation.

According to NBS, the inclusion of these inappropriate activities is to provide a more accurate reflection of Nigeria’s economic activities, landscape and to capture segments of the economy that were previously unaccounted for.

These revelations were made known at a sensitisation workshop on GDP and Consumer Price Index Rebasing organised in collaboration with the Nigerian Economic Summit Group.

The NBS added that the rationale behind this inclusion is aligned with international best practices as outlined by the System of National Accounts (SNA) 2008, which suggests that all economic activities, including those that are illegal, should be included in GDP calculations.

Elaborating on the inclusion of illegal and hidden activities in the classification of economic activities for computation of the GDP, the Head of National Accounts, NBS, Dr Baba Madu, said: “Illegal activities will be in line with the national best practices that are System of National Accounts, 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 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 Indian 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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