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NBS Set to Include Prostitution, Drug Trade, and Other Illegal Activities in Nigeria’s GDP

Published by admin on January 10th, 2025.

NBS Set to Include Prostitution, Drug Trade, and Other Illegal Activities in Nigeria’s GDP

The National Bureau of Statistics (NBS) has announced that, moving forward, it will include illegal and informal activities such as prostitution and drug trafficking in its calculations of Nigeria’s Gross Domestic Product (GDP).

Additionally, the NBS has recommended adopting 2019 as the new base year for GDP calculations and 2024 for inflation measurement.

This update was revealed during a workshop focused on the rebasing of GDP and the Consumer Price Index (CPI), organized in collaboration with the Nigerian Economic Summit Group (NESG).

The NBS explained that 2019 was chosen as the new base year because the economy was relatively stable that year, in contrast to the disruptions caused by the COVID-19 pandemic and policy shifts in the years that followed.

The rebased GDP will now account for previously overlooked sectors such as the digital economy, the activities of pension fund managers, the National Health Insurance Scheme (NHIS), the Nigerian Social Insurance Trust Fund (NSTIF), modular refineries, and domestic households acting as employers. The inclusion of illegal and hidden activities is also part of this comprehensive update.

Dr. Baba Madu, Head of National Accounts at NBS, clarified that incorporating illegal activities aligns with international standards like the System of National Accounts (SNA 2008). He cited examples such as drug trafficking and prostitution, which, though illegal in Nigeria, contribute significantly to other economies. The NBS acknowledged the challenges in gathering data for these sectors but emphasized that these activities represent less than 3.5% of the total GDP.

Prince Adeyemi Adeniran, the Statistician General of the NBS, underscored the importance of the rebasing process. He noted that updating GDP and CPI figures ensures they reflect current economic conditions, including new industries and shifting consumption patterns. This process is essential for informed decision-making and effective governance.

Dr. Tayo Aduloju, CEO of the NESG, highlighted the benefits of rebasing, particularly in improving the accuracy of economic indicators. He pointed to the 2014 GDP rebasing, which led to a reduction in Nigeria’s debt-to-GDP ratio from 19% to 11%, bolstering the country’s creditworthiness. This, in turn, enhanced Nigeria’s appeal to foreign investors. Additionally, he emphasized how rebasing sharpens policymaking by providing a more precise picture of the economy, helping to identify growth sectors and areas that need targeted intervention. He referred to Ghana’s 2010 GDP rebasing, which boosted its GDP by 60% and helped shape more effective infrastructure and social investments.