Rebased GDP Figures Not Evidence of Economic Progress, MAN Tells FG

The Manufacturers Association of Nigeria (MAN) has called on the federal government not to see the nominal increase of 18.3 per cent year-on-year Gross Domestic Product (GDP) growth recorded in the latest rebasing of Nigeria’s economy as evidence of significant economic progress.

It explained that this is because it might have obscured some of the economy’s deep-rooted challenges as real GDP’s average growth remained weak at 1.95 per cent between 2020 and 2024.

MAN also said the declining performance of the manufacturing sector from 27.65 per cent in the 2010 base year to 21.08 per cent in 2019 as seen from the rebased GDP was a strident call for structural industrial reforms.

These views were expressed by the Director General of MAN, Mr. Segun Ajayi-Kadir, in his response to questions on the National Bureau of Statistics (NBS) rebasing exercise of the economy.

Ajayi-Kadir pointed out that although the GDP’s rebasing has confirmed that Nigeria’s economy has become statistically larger; it has also made it plain that Nigeria’s economy is neither more productive, nor more industrialised.

He said: “The revised nominal GDP estimate, showing an 18.3 per cent year-on-year increase, is a direct outcome of improved data capture, especially in agriculture, services and informal sector activities. Notwithstanding, MAN strongly cautions against interpreting this nominal expansion as evidence of significant economic progress.

“MAN, therefore, calls on the government to treat the rebased GDP not as a celebration of growth, but as a strident call for structural industrial reforms,” adding that “Nigeria must re-industrialise to achieve inclusive growth, build export capacity, and reduce dependence on primary commodities and informal activities.”

MAN therefore urged the government to prioritise manufacturing policy, financing and infrastructure development because without a strong industrial base, GDP expansion may just become a ‘hollow statistic’ that is not backed by productive transformation.

The director general of MAN said that despite the upward revision, the real GDP growth remains weak, averaging just 1.95 per cent between 2020 and 2024.

“This sluggish real growth shows the underlying fragility of Nigeria’s productive base and the capacity of the economy to deliver sustainable and inclusive development,” he added.

He also expressed MAN’s concern over the declining role of the industrial sector, which the rebased figures have made unmistakably clear.

He said: “Industry’s share of GDP fell from 27.65 per cent in the 2010 base year to 21.08 per cent under the 2019 rebased structure, marking a structural shift away from production toward low-productivity service activities.

“While the rebasing exercise reveals a more diversified economy, it also exposes the underperformance of industry, particularly the manufacturing sector that should be the backbone of Nigeria’s economic transformation.

“Manufacturing is structurally weak, with sub-sectors that should be growth drivers performing below potential, as indicated in the report. Based on the figure released, the average annual growth rate of the manufacturing sector between 2019 and 2024 is negative (-0.76 per cent)

“This means that Nigeria’s manufacturing sector has been shrinking in real terms over the past five years.”

According to MAN, the upward revision of Nigeria’s GDP to $243 billion could offer a lift in investors’ confidence and improve headline macroeconomic ratios such as the debt-to-GDP ratio.

It, however, noted that confidence in the economy is anchored not just on size but also on structural resilience, depth of industrial capacity, and productivity growth.

“In this regard, we need to refocus on the development of the real and high-impact driven sector. More worrisome is the underperformance of the manufacturing sector whose contribution to GDP remains low and increasingly volatile.

“This scenario speaks loudly for sustained industry-centric policies, which has already been exemplified by the Industrial Revolution Working Group, infrastructure investments, and improved access to long-term finance to revitalize the industrial sector. This is the way for the growth in GDP to alleviate poverty, create jobs, and contribute to macroeconomic stability,” it added.

MAN said that the rebased GDP should not be seen as an endpoint, but as a starting point for strategic reform, emphasising that, “if Nigeria is to achieve inclusive and sustained growth, manufacturing must move from the margins to the mainstream of economic policy.”

Also, responding to the result of the latest GDP rebasing exercise, the Director General of Nigeria Employers’ Consultative Association (NECA), Mr. Adewale-Smatt Oyerinde, said that the rebased GDP highlighted Nigeria’s potential that would require reforms that reflect the country’s current economic landscape to unlock.

SOURCE: THISDAY