In the wake of dodgy official statistics presented by government agencies which do not reflect the true state of the economy, how trustworthy are Nigeria’s economic indicators? Osaze Omoragbon asks.

Soludo         If there is anything investors and the general public have learnt from the economic downturn following the drop in the price of crude oil, it is to always take official statistics with a pinch of salt. Indeed, when an economy faces a downturn, experts say attempts by various tiers of government to talk up the economy by buttressing economic data rarely do any good. For example, when the Naira exchange rate was heading for a freefall in the parallel market despite attempts by the Central Bank of Nigeria (CBN) to assure the public that it has enough reserve to meet demands, panicky foreign investors and speculators took positions that was directly opposite the CBN viewpoint. “Of course, investors are not stupid. They can read the direction of the economy as good as the CBN. They make use of every source of information available to them and price-in such information into their decision making,” says Joseph Inuata, a stock broker. Alas, the CBN failed in its bid to assure investors and resorted to knee-jerk responses such as capital controls which it recently reversed and stopped the sale of foreign exchange to Bureaux de Change.

Observers also point to attempts by the immediate past administration of Goodluck Jonathan to talk up the economy in the heat of the electioneering campaign prior to the 2015 general elections. At every forum, the former Finance Minister, Dr. Ngozi Okonja-Iweala always reeled out statistics which critics claimed were divorced from reality. While the federal government was proclaiming statistics to show economic growth, job creation, and declining inflationary pressure among other pointers of economic prosperity, the opposition painted a gloomy picture that was more at home with the electorate, hence its victory at the polls. “Some of the statistics peddled by some government institutions are incorrectly measured at best and fictitious at worst,” says a financial consultant who pleaded anonymity. The Nigerian Economic Society (NES) also argues that the purported growth experienced by the country after the rebasing of Nigeria’s gross domestic product (GDP) was not a true reflection of the lives of the citizenry. For example, most Nigerians seem to disbelieve the inflation figures which the National Bureau of Statistics (NBS) puts in the single digit.

Femi Awoyemi, CEO Proshare Nigeria
Femi Awoyemi, CEO Proshare Nigeria

Given the dwindling purchasing power in the economy, many are at a loss as to how the NBS could claim inflation is in the single digit. With a large informal sector and an import intensive economy, experts reckon inflation ought to have risen significantly given the fall in the Naira-Dollar exchange rate and the attendant pass-through. Although, the official exchange rate is N199 to the Dollar, in the black market, which is mostly patronized by small businesses, it tops N300. The National Bureau of Statistics (NBS) puts the inflation figure for December at 9.55 percent (with 0.99 percent month-on-month change), however, some financial analysts think it is closer to 15 percent. Most laughable, according to critics, is the unemployment figure which the NBS says stood at 9.9 percent in the third quarter of 2015. If that was the case, observers argue that the implication is that Nigeria has a lower unemployment rate than Spain (22.7), South Africa (25.2%) and France (10.5 %). But ask an average Nigerian and he or she will tell you that 40 percent should be appropriate. But Femi Awoyemi, chief executive officer, Proshare Nigeria says “people should believe the figures from the NBS because it is a credible institution.”

However, informed analysts say dodgy statistics is not peculiar to Nigeria while pointing to bigger economies that have qualms with international bodies such as the International Monetary Fund (IMF). Indeed, the IMF threatened to sanction Argentina over its publication of false statistics. Venezuela has also come under the spotlight for its false statistics while China is thought to be the number one offender due to its dictatorial tendencies. Recently, the head of Bureau of Statistics, in China Wang Baoan was arrested for bribery and corruption, further denting the credibility of official statistics in China. India of recent has published statistics disbelieved by investors and academics.

Yemi Kale, DG National Bureau of Statistics
Yemi Kale, DG National Bureau of Statistics

What is responsible for this phenomenon? Some critics think the autonomy of statistical agencies has been infringed upon by political leaders who are bent on altering figures to aid their political ambition. Indeed, Professor Chukwuma Soludo, former CBN governor and Dr. Okonjo-Iweala had sometime last year bickered over the credibility of poverty data as supplied by the NBS. Soludo had written a critical piece on the Jonathan administration in the run-up to the 2015 general elections which then finance minister took exception to. Okonjo-Iweala accused Soludo of seeking to undermine the government using falsehood, while Soludo accused her of fiddling with economic indicators and the credibility as well as independence of the statistical agency. “What worries me is that the Jonathan administration is the first in our history to attempt to manipulate our national statistics under Okonjo-Iweala. When the NBS published poverty figures in 2011 she felt indicted and incensed. She called upon the World Bank to come and examine the ‘methodology’ and get NBS to ‘review’ its numbers,” Soludo said about Okonjo-Iweala. According to Soludo, Oby Ezekwesili then World Bank Vice President for Africa resisted such moves but when she left, the World Bank began peddling new figures “without conducting a new survey.”

In 2010, the NBS reported 69 percent poverty rate in Nigeria, but the World Bank reported 35 percent for the same period. Critics claim that this has dealt a serious blow to the integrity of the figures released by the NBS. To observers, true independence of the NBS would restore credibility to the agency and confidence in the Nigerian statistical data.

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