Newscenter Media News In a bold move toward aligning with global standards, the National Bureau of Statistics (NBS) has announced plans to incorporate hidden and illegal economic activities—such as prostitution and drug trafficking—into Nigeria’s Gross Domestic Product (GDP) calculations.
This decision marks a significant shift in how the nation evaluates its economic output, aiming to provide a more comprehensive picture of economic activities.
The announcement came during a sensitization workshop on GDP and Consumer Price Index (CPI) rebasing, held in collaboration with the Nigerian Economic Summit Group (NESG).
At the event, the NBS proposed 2019 as the new base year for GDP calculations, citing it as a period of relative stability before the economic disruptions caused by the COVID-19 pandemic and other policy shifts. The rebased GDP will also include modern economic sectors such as the digital economy, modular refineries, and activities related to social insurance schemes.
However, the inclusion of illegal and hidden economic activities has garnered the most attention. Dr. Baba Madu, Head of National Accounts at the NBS, justified the move by pointing to international standards outlined in the 2008 System of National Accounts (SNA), which advocate for a comprehensive approach to GDP measurement.
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“If you are into, for instance, drugs, there are some countries where this drug activity drives their economy,” Madu explained. “It is illegal here because there is no legal backing. Also, prostitution—these individuals earn income, and some even live bigger than those in the formal sector. The SNA does not say no to these; it is we [who resist]. But the challenge is the legal backing and how to get the data.”
Madu acknowledged that obtaining reliable data on illegal and hidden activities poses a significant challenge. He cited examples such as underreported income and covert sales, which distort economic measurements.
“If I ask you how much you earn in a month, you will lower your income,” he remarked, emphasizing the issue of hidden earnings. He also pointed to the example of shopkeepers discreetly selling illicit substances alongside legal goods, stating, “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.”
Despite these challenges, the NBS insists that capturing these activities will enhance the accuracy of Nigeria’s economic data and provide insights into sectors that, while operating outside the law, still contribute to the economy. By integrating hidden and illegal activities into GDP calculations, Nigeria is taking a pragmatic step toward reflecting the true breadth of its economic landscape.
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