How Nigeria performed in 2019
At the end of February, the National Bureau of Statistics (NBS) announced that the Nigerian economy had grown by ~2.3% in 2019. While most headlines celebrated it as the highest Gross Domestic Product growth (GDP) since 2015, there’s more to it than meets the eyes.
Let’s dig deeper
Contribution to total GDP: The Oil sector contributed 7.78% while the Non-Oil sector contributed 91.22%.
GDP measures the monetary value of everything produced in the country. The Oil sector only contributes a tiny portion of Nigeria’s GDP but Nigeria is still Oil dependent because over 80% of Nigeria's total exports are Oil products.
Relationship with Population
Nigeria’s population is said to currently grow at 3% every year, that’s more than GDP Growth.
What this means: When population increases, it can only be by more working (migration of adults) or non-working (Babies) population for any country. Increase by, say, migration of adults means there’d be more workers in the economy to produce more goods and services. However, In Nigeria’s case, where the population is growing by babies who can’t contribute to the economy yet. It means more people sharing the available resources, that’s counterproductive.
Compared to West African countries
When compared to other West African countries, they grew by 6% on average in 2018, led by Côte d'Ivoire at 7.4%, only Liberia (3.2%) comes close to Nigeria in terms of low growth.
While Nigeria is taking a lot of beating, our case isn’t as bad as South Africa which entered a recession - when the GDP falls for two consecutive quarters - after results for 2019 Q4 were released. For the whole of 2019, the South African economy grew by only 0.2%
I don’t feel any different about all this, How does this affect me?
For a number of years now, there’s been questions around whether GDP is an accurate measure of economic progress, GDP which measures national income, emerged from the need to better understand economic challenges following the Great Depression and to help track critical supply chains during the Second World War but GDP was never intended as a measure of well-being. It’s okay to feel that GDP changes doesn't directly affect you.
A number of indices like the UN’s Sustainable Development Goals or Canada’s Comprehensive Wealth project seem to offer alternative ways to measure how a nation is progressing.