NIGERIA NOW AFRICAN NO 2 ECONOMY? SO WHAT

The news this week that Nigeria is now once again trailing South Africa on the scale of Africa's biggest economies ought not to come as surprise.

Yet it did and Nigerians were not amused with some pointing accusing fingers at President Buhari while the man himself was lamenting that suddenly Nigeria has become a poor nation

Well, so what? It is wrong for anybody to gleefully expand his ego or painfully moan because of gross domestic product comparison across borders.

Even the United States of America can not robustly do that to China now because to compare international GDPs who must face the limitations of currency valuation.

All economic values, for convenience are stated in one currency or the other, and to compare values within one country to another requires you use existing exchange rate.

Yet, the truth is that if the Naira exchanges for N300 to the dollar, for example, that is not to say that you will actually spend the equivalent of N300 to buy a bag of salt in Nigeria and buy the same bag for one dollar in the US.

Yet, it is only when such is the case that one successfully compare national GDPs with each other. Everything else is an estimate which could in fact favour over valued currencies and understate economies with undervalued currencies.

Besides, comparing GDPs in Africa have the added issue of very prominent unreported economy and income. Thus, at best, the less effective the national economy is at recording and monitoring economic activities within its domain, the more unrealistic will be GDP estimates.

So why break heads or loose valuable sleep over number two and number one. All that is temporary.

Want to make it more real? Then, drive your local production with the right incentives through combined fiscal and monetary policies moving in one direction, stop boring holes in the economic tank while it is struggling to fill up and stop infighting at a time all shoulders should be on the wheel for national survival.

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