ICYMI: Tinubu’s Government To Include Drug Peddling, Prostitution In GDP Calculation

The National Bureau of Statistics (NBS) on Friday said that it would incorporate illegal and hidden activities, like prostitution and drug peddling, into the calculation of Nigeria’s Gross Domestic Product (GDP).

The agency made this known at a workshop on GDP and Consumer Price Index (CPI) rebasing in collaboration with the Nigerian Economic Summit Group (NESG).

The rebasing exercise will adopt 2019 as the new GDP base year due to the relative stability of that period, which was unaffected by the COVID-19 pandemic and major policy disruptions.

The base year for inflation calculations will shift to 2024.

The updated GDP will reflect new sectors, including the digital economy, activities of pension fund administrators, the National Health Insurance Scheme (NHIS), the Nigerian Social Insurance Trust Fund (NSTIF), modular refineries, and domestic households employing labour.

It is also expected to capture illegal and hidden activities in line with the 2008 System of National Accounts (SNA), an international framework for economic measurement.

According to Dr Baba Madu, Head of National Accounts at the NBS, while activities like drug trade and prostitution are illegal in Nigeria, they generate significant income in some economies.

He highlighted challenges such as the lack of legal backing and data collection issues but noted that these sectors account for less than 3.5 per cent of the country’s GDP.

In his words:

If you are into, for instance, drugs, there are some countries, it is  this drug  that is driving their economy. It is illegal here because there is no legal backing. Also prostitution, they also earn income. Some even live bigger than those in the formal sector. The SNA does not say no to these, it is we. But the challenge is the legal backing  and how to get the data. And then, of course, the hidden economy. If I ask you,  how much do you earn in a month, you will lower your income. Or if somebody is selling provision in a store, and before you know it he started  selling Indian hemp. 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 per cent of the GDP.

This announcement came after President Bola Tinubu stated in November that more work needed to be done following an NBS report showing that the nation’s economy grew (by 3.46 per cent) in the third quarter more than the last quarter of 2024.

The plans to include these illegal activities, such as drug peddling, into the calculation of Nigeria’s Gross Domestic Product (GDP) as part of the work needed to be done to improve the nation’s GDP does not come as a surprise given the damning evidence released that effectively confirms President Tinubu as a drug lord.

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