By NICK DAZANG
On Monday, July 21, 2025, the Statistician-General of the Federation, Prince Adeyemi Adeniran, offered us a partial glimpse into the Nigerian economy. According to Prince Adeniran, our economy, following the rebase of our Gross Domestic Product, GDP, grew by 3.13 per cent in the first quarter of 2025 from 2.27 per cent as recorded in the same period of 2024.
Furthermore, the economy, which was rebased from 2010 to 2019, grew to N372.82 trillion from N205.09 trillion. The growth in the economy is said to be attributed to wider coverage of areas which were either hitherto glossed over or were under reported. These areas include: Fin Tech, Telecommunications, Real Estate and activities in the Informal Sector of the economy.
By the NBS’s ranking, Crop Production accounted for 17.58 per cent of this growth; Trade, 17.42 per cent; Real Estate, 10.78 per cent; Telecommunications, 6.78 per cent; and Crude Petroleum and Natural Gas, 5.85 per cent. Compared with figures in 2019, there appears to be a decline in Crop Production, which was 19.62 per cent, while there is a marked increase in Real Estate which was 6.24 per cent.
At first blush, these figures look salubrious and call for celebration. They also resonate with the objectives of rebasing a country’s GDP, namely to: indicate growth rates, sectoral contributions and to provide an overall picture of the economy. On close examination, however, they speak, in clear relief, to an economy troubled and in a free fall. In real or dollar terms, the new “growth” figure being flaunted is dismal and, is at best, misleading. At the current exchange rate of N1,529.53 to the U.S. Dollar, the economy, as recently rejigged and recalibrated, amounts to a mere $243.526 billion. This figure falls far below Nigeria’s GDP as at 2013, which stood at $509.96 billion.
To underline the economy’s precipitous decline and the huge gap between its current GDP and the $1 trillion economy which this government aspires to, Nigeria is trailing behind South Africa, with a GDP of $410.338 billion; Egypt, with a GDP of $347.342 billion; and Algeria, with a GDP of $268.885 billion. In its previous rebasing, Nigeria led these countries, making it the largest economy on the African continent.
Apart from an economy hall marked by decline, it is one caught and immersed in contradictions. Imagine: Nigeria’s economy has the singular and bizarre distinction of expanding and contracting at the same time. It shows growth, by dint of figures bandied by the NBS and IMF-World Bank. But it seldom exudes or reflects development or improvement in the lives of its impoverished citizens.
While government claims it is raking in monies on account of the withdrawal of subsidy on petroleum, it is at the same time going on a borrowing binge to pay for infrastructure. In June, for instance, not less than N18 trillion was shared by the three tiers of government. Worse is the cost of living crisis which millions of Nigerians face. Though official figures suggest that inflation is being tamed, food inflation is ferocious. By the NBS’s figures, not less than 63 per cent of Nigeria’s population, representing 133 million, are multidimensionally poor. And going by fears recently expressed by UN agencies, not less than three million people are susceptible to Severe Acute Malnutrition, SAM, in the North- Eastern BAY States of Borno, Adamawa and Yobe.
As if that were not bad enough, insurgency, genocidal killings, farmer-herder conflicts, kidnapping and banditry have made it challenging for farmers to cultivate their lands. Those who have access to these farmlands buy fertilizers at exorbitant prices. The result of this disincentive is that farmers are migrating away from cultivating maize and sorghum, which require the application of fertilizers, to perishables and vegetables. Add to these challenges the annual flash floods, which have become the new normal, and the picture that comes across is unflattering.
It is regrettable that even though the picture painted by the NBS, following the recent rebase, shows considerable activity in the informal sector of the economy, not much is being consciously done to give this crucially important area a shot in the arm. Together with the embattled Organised Private Sector, OPS, and members of the Manufacturers Association of Nigeria, MAN, they are either being emasculated or driven to the margins.
On Tuesday, July 22, 2025, the Central Bank of Nigeria, CBN, announced that it was retaining the interest rate of 27.5 per cent as proposed by its Monetary Policy Committee, MPC. This means that commercial banks will lend to customers at at least 30 per cent. With such a high borrowing rate, it is not conceivable that any businesses, particularly small and struggling ones, can borrow, grow and make profit. And if they cannot grow, they cannot employ or impact their environments meaningfully.
By the same token, even the more established big businesses will be constrained. They will not be positively disposed to pass off the burden of these high interest rates to customers/consumers who are already impoverished. Where interest rates are incredibly high as obtains in Nigeria, the entire procurement process is imperiled. Value for money, a key driver and motivation for the process, is not enjoyed by government, and by extension, the citizenry. This is because contractors/service providers are forced to cut corners in order to meet up. This is more so in an economy framed by instability in the foreign exchange rate and one liable to the vagaries of inflation.
To genuinely grow our economy and to create jobs, thereby impacting the people positively, we must bring down our interest rates. Our lending/borrowing rates should not cross the single digit threshold as obtains in developed economies. We must address the contradictions in our economy. We cannot proceed on a borrowing spree at a time when we enjoy an increase in our income. Our surplus should be invested in critical sectors. Transparency and accountability must perfuse and inform all spheres of public life. It is opaque and unbecoming that up to today, we have not been officially informed about the amount used to procure our presidential jet, the amount used to retrofit it and the amount recently expended to repair it in South Africa.
We must prioritise security. It will make our quest for Foreign Direct Investments, FDI, seamless. It will facilitate the return of our farmers to their lands, thereby fostering food security, employment and prosperity. To incentivise our farmers, we must make fertilizers available at the right prices and at the right time. We must address our broken energy/electricity, health and educational systems. We must continue to fix critical infrastructure. All these, put together, will grow the economy, impact the people and put our country in good stead. It will also earn us respect in the comity of civilized nations.
•Dazang, a public affairs analyst, wrote from Lagos
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