The much anticipated Gross Domestic Product (GDP) rebasing figures will reveal a deeper problem of income inequality in Nigeria, a report has stated.
The report also stressed that if the country's GDP is rebased, its non-oil revenue collection ratio - which is what Nigeria collects from taxation - may fall to less than four per cent of GDP, much lower than most regional peers.
The Head of Africa Research at Standard Chartered bank, Razia Khan, who stated this in a report titled: "An Extra Strong MINT," pointed out that for a developing country, the emphasis shouldn't be so much on the size of current GDP, but instead, the potential of the economy to continue to grow is what should matter.
The National Bureau of Statistics (NBS) is expected to release figures for the preliminary estimates of the rebased GDP this month. The move is basically to change the base year for the GDP computation to 2008 from 1990.
But report noted that: "But the proportion of Nigerians who live on a dollar a day, estimated at 63 per cent in 2011, is unlikely to change very much.
Nigeria's metrics may be problematic, and the rebasing of GDP is likely to draw greater scrutiny to what is missing. The over-dependence on oil revenue, despite the supposedly declining role of oil in the economy, suggests that the government enjoys a degree of autonomy from tax-raising that may weaken political accountability.
"One of the early achievements of post-apartheid South Africa was success in revenue collection, which stalled only around the global crisis. In Nigeria, despite the shift to more accountable forms of governance after 1999, little progress has been made in mobilising significantly more non-oil revenue - at least as measured against GDP."
On his part, the Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi said: "I am not one of those who get carried away by GDP rebasing because ultimately, whatever numbers you get from GDP as they say, how does it affect the lives of people?"
The central bank governor however who spoke in Lagos recently said there was need for structural reforms in the country.
Continuing, the report expressed disappointment that despite significant weak infrastructure, which would require years of public and private sector investment to remedy, the country has accumulated little long-term oil savings.
According to the report, in the event of an oil-revenue shock, there would be no financial cushion and capital expenditure may have to be cut back.
It noted that post-rebasing, Nigeria's average per capita income, currently estimated by the International Monetary Fund at $1,725 a year, may increase substantially.
"Nigeria, by contrast, is overly-dependent on oil, which contributes more than 70 per cent of consolidated government revenue. If oil is taken out of the equation, Nigeria's revenue-to-GDP ratio, normally around 26 per cent of pre-rebased GDP, falls to around six and seven per cent.
"The challenge for Nigeria, both pre and post-rebasing, is to ensure that conditions that support economic transformation, not just headline growth, are in place," it added.