Nigeria is one of the world’s fastest growing countries and since 2008 we have grown faster than the US, UK, the EU and many advanced countries. Surely that cannot be right! Well it is not only right but as factual as 1+1=2. Growth rates are similar in idea to the percentage increase in sales or profit only this time it tracks the percentage increase in the value of Gross Domestic Output GDP. So why don’t we just see if GDP rises or falls each year? Two graphs will throw a clearer light.
The first graph shows nominal and real GDP figures i.e adjusted for inflation between 1960 and 2010. Straightaway, the problem with using raw figures appears, it permanently ‘trends’ upwards giving a false sense of progress. This stems from a feature associated with GDP series universally – in statistical parlance, the series is said to be non-stationary or integrated of order 1. With Growth rates a much clearer and objective picture of the transitions of Nigeria’s economy can be obtained as seen below. In econometric work, growth rates are said to be the first difference of the series however as logs are widely used, this would be called the logged first difference.
From above we can see that Nigeria’s best years were shortly after the civil war and at the start of the oil boom in the 70s. In addition the argument that Nigeria hasn’t made much progress since 1999 is indeed a myth. Our worst years were during the civil war which in accounting terms would be referred to as an ‘extraordinary’ event. In Peacetime, the period between 1981-85 under the administrations of Shehu Shagari and Muhammadu Buhari were pretty tough times. This period coincided with the global glut in oil prices and raises concerns with regard to the economic crisis management skills of Buhari as we head into increased volatility headwinds in oil prices.
So how does this affect the price of crayfish in the market you might ask? In economics, there exists a well proven correlation between high economic growth rates and development. Throughout the 1980s, China and many South Asian countries recorded impressive growth rates in contrast to Sub-Saharan Africa and Latin America which experienced little or low growth rates, persistent balance of payment difficulties, mounting debt problems etc. Only those countries that grow, give themselves a chance at lifting a bigger chunk of their populace out of poverty. This comes with a caveat, if growth is inequitably distributed as in Nigeria, development will remain stagnated.