There are several technical jargons and acronyms peculiar to many professions. In economics, one of the most common acronyms used is GDP, which stands for Gross Domestic Product.
It is often cited in business news across newspapers, radio, television news, and in reports by governments, central banks, and the business community.
It is widely used to measure the health of national and global economies. According to Tim Callen, the Divisional Chief in overseeing IMF’s Middle East and Central Asia Department,“When GDP is growing, especially if inflation is not a problem, workers and businesses are generally better off than when it is not.”
Back story: Recall that a source reported, on Monday, that Nigeria’s Gross Domestic Product (GDP) in real terms declined by 6.10% (year-on-year) in Q2 2020, thereby ending the 3-year trend of low but positive real growth rates recorded since the 2016/17 recession.
According to the numbers contained in the GDP report, the performance recorded in Q2 2020 represents a drop of 8.22% points when compared to Q2 2019 (2.12%), and 7.97% points decline when compared to Q1 2020 (1.87%).
Apparently, the significant drop reflects the negative impacts of the disruption caused by the COVID-19 pandemic and crash in oil price on the Nigerian economy.
What is GDP?
GDP is the monetary value of final goods and services (i.e those that are bought by the final user), produced in a country in a given period of time; per quarter or year. It counts all the output generated within the borders of a country, and is composed of goods and services produced for sale in the market. It is important to note that it also includes some non-market production like defence or education services provided by the government.
Its twin, Gross National Product (GNP), counts all the output of the residents of a country. For instance, if a German-owned company has a factory in Nigeria, the output of this factory would be included in Nigeria’s GDP, but in Germany’s GNP.
However, not all productive activity is included in GDP. Some of such activities are unpaid work (work performed at home or by volunteers) and black-market. They can’t form part of GDP because they are difficult to quantify or value accurately. For instance, a food vendor that cooks for a customer would contribute to GDP but won’t if he cooks at home for the family.
Also, wear and tear of Capital stock like machines, buildings, which are used in producing the output are not inclusive in GDP. If this depletion of the capital stock, called depreciation, is subtracted from GDP, we get the net domestic product.
How GDP is calculated
- Production approach: This adds the value-added, which is the total sales – the value of intermediate inputs into the production process) at each stage of production. What is an intermediate input? Flour would be an intermediate input and bread the final product, or an architect’s services would be an intermediate input and the building the final product.
- The expenditure approach adds up the value of purchases made by final users. For example, “The consumption of food, televisions, and medical services by households; the investments in machinery by companies; and the purchases of goods and services by the government and foreigners,” Callen added.
- The income approach: This sums the incomes generated by production. According to the expert, this is the compensation paid to employees, rent paid to landowners, interest paid on capital, and profit paid to the company owners.
GDP in a country is usually calculated by national statistical agencies, which is the National Bureau of Statistics in the case of Nigeria. The agency compiles the information from a large number of sources.
In making the calculations, however, most countries follow established international standards. The international standard for measuring GDP is contained in the System of National Accounts, 1993, compiled by the International Monetary Fund, the European Commission, the Organisation for Economic Co-operation and Development, the United Nations, and the World Bank.
Since GDP gives information about the size of the economy and how an economy is performing, one thing people want to know about an economy is whether its total output of goods and services is growing or shrinking.
But because GDP is collected at current, or nominal prices, one cannot compare two periods without making adjustments for inflation.
To determine “real” GDP, its nominal value must be adjusted to take into account price changes to allow us to see whether the value of output has gone up “because more is being produced or simply because prices have increased. A statistical tool called the price deflator is used to adjust GDP from nominal to constant prices.”
The growth rate of real GDP is often used as an indicator of the general health of the economy. In broad terms, an increase in real GDP is interpreted as a sign that the economy is doing well.
Callen said, “When real GDP is growing strongly, employment is likely to be increasing as companies hire more workers for their factories and people have more money in their pockets. But real GDP growth does move in cycles over time.
“Economies are sometimes in periods of boom, and sometimes periods of slow growth or even recession (with the latter sometimes defined as two consecutive quarters in which output declines).
What GDP is not
It is also important to understand what GDP cannot tell us.
GDP is not a measure of the overall standard of living or well-being of a country. Why? Although changes in the output of goods and services per person (GDP per capita) are often used as a measure of whether the average citizen in a country is better or worse off, it does not capture things that may be deemed important to general well-being.
GDP is generally not a good measure of economic development. GDP’s preference for tangible goods also means it is insufficient at capturing the value of technology.
Generally, there are five indicators that GDP doesn’t take into account that could help measure national progress more accurately and these include: job quality (underemployment /unemployment), well-being, carbon emissions, inequality, and human health.
LG polls: Voters with Temporary Cards can vote – LASIEC
The Lagos State Independent Electoral Commission (LASIEC) says voters in possession of the Temporary Voter Cards (TVCs) are eligible to vote in Saturday’s local government election in the state.
Justice Ayotunde Phillips (retd.), LASIEC Chairman, said this at a news conference on Friday at its headquarters in Yaba, Lagos.
Phillips said voters in possession of either the Permanent Voter Cards (PVCs) and TVCs would be allowed to cast vote across the state.
She also reiterated that the commission was ready to conduct a free, fair and credible poll.
She said: “Voting process starts at 8.00 a.m. and end at 3.00 p.m., while those in the queue by 3.00 p.m. shall be attended to. Election shall be conducted with the use of smart card readers, PVC and TVC.
“Persons Living with Disabilities would be adequately assisted in the election process, while the elderly people, pregnant women and breastfeeding mothers shall be giving preference in casting their votes.”
According to her, the development that leads to a free, fair and credible election starts with the promotion of public confidence and trust in the process.
She noted that this could only be achieved through active involvement and collaboration with crucial stakeholders.
Phillips said that as part of preparations, non- sensitive materials had been deployed while the distribution of sensitive materials to all the 20 LGAs and 37 LCDAs would be done on Friday night in the presence of security agencies.
The chairman, who noted that 15 political parties would be participating in the election, assured the electorate of adequate provision for security of lives and property.
“The electorate and Lagos residents are being assured that there will be adequate security beyond the exercise.
“Security of lives and property before, during and after the election is fundamental and is being given topmost priority.
“The commission is leaving no stone unturned to ensure a successful, free, fair and credible election that is devoid of violence, intimidation and harassment,” Phillips added.
She urged all stakeholders to inform, encourage and mobilise voters to come out and freely express their political choice through the electoral process.
Phillips said the commission had embarked on stakeholders’ sensitisation programmes in all the five divisions of the state to stem the tide of voter apathy.
According to her, the commission has concluded recruitment and training of all ad hoc staff for the poll.
The News Agency of Nigeria (NAN) reports that security operatives with patrol vans and Armoured Personnel Carriers (APCs) have been strategically positioned in and around the LASIEC office.
Vehicular movement also has been restricted around LASIEC office located at No 2 Birrel Avenue Sabo, Yaba while the entire stretch of Lancaster Road, Sabo, Yaba has been barricaded.
Nigerians will be happy with Buhari by 2023 ― Gambari
Chief of Staff to the President, Professor Ibrahim Agboola Gambari, on Sunday assured that by the end of the current administration (in 2023) Nigerians would be happy when all the current projects embarked upon would have been completed.
He, therefore, urged Nigerians to give maximum support to President Muhammadu Buhari saying that his success is everybody’s success.
Professor Gambari was received at the Ilorin International Airport by high powered government officials led by the Deputy Governor of Kwara state, Mr Kayode Alabi, Senators representing Kwara Central and North, Ibrahim Oloriegbe and Sadiq Umar, Speaker of the State House of Assembly, Yakubu Danladi Salihu, Special Advisers on Political Matters, Abdullateef Alakawa, other top governor’s appointees and party chieftains.
The president’s Chief of staff who came to his ancestral home, Ilorin, for the first time after his appointment made the call while speaking with journalists in Ilorin, Kwara State.
He said “this period is an opportunity to reflect on the state of our country and to canvass maximum support to our president, Muhammadu Buhari.
“This is because his success is our success and by the grace of God when all the programmes and projects he has embarked upon, in economy, political and social affairs materialize for the betterment of our people, at the end of his tenure, Nigeria will be more United, more peaceful and be more prosperous ”
Professor Gambari, who could not hide his happiness over the warm reception organised for him by the Kwara state government, applauded Governor AbdulRahman AbdulRazaq over his various achievements in the state.
He said “I am grateful to the Almighty Allah for giving me life and health to be able to come back to the city of my birth as from where all my trajectory occurred, and for the State Government for this heroic reception.
“I thanked His Excellency, the Executive Governor of Kwara State, AbdulRahman AbdulRazaq, who has been doing well, his Deputy, distinguished Senators and all the senior government officials who have been too gracious in welcoming me and of course, Mai Martaba, the Royal Highness, Emir of Ilorin and all members of the community for the warm reception”.
Senate President explains why senate voted for conditional E-transmission of results
The Senate President, Ahmad Lawan, has given reasons to justify the senate’s decision on the electronic transmission of electoral results.
His reaction follows the vote by the senate that the Independent National Electoral Commission (INEC) may consider the electronic transmission of results, provided the national coverage is adjudged to be adequate and secure by the National Communications Commission (NCC) and approved by the National Assembly.
Lawan explained that the senate voted the way it did during the consideration of the Electoral Act 2010 Amendment Bill, in defence of about half of the Nigerian voters whose votes may not be counted with immediate deployment or application of electronic transmission of election results.
This disclosure was made by the Senate President while speaking to the press while on a constituency visit to his Yobe North Senatorial District over the weekend.
What the Senate President said about the passage of the electoral bill
Lawan said, “I’m happy that we have been able to pass the amendment even though some people are complaining of what we have passed in the Senate and probably what the House of Representatives has also passed.
“When the majority of Senators voted against immediate application or deployment of electronic transmission of results from the polling units, to the ward, to the local government, states and federal, they didn’t say they do not believe in electronic transmission (of election results).
“All of us in the Senate, 109 of us, believe that at one point, our electoral process must deploy electronic transmission so that it eases and enhances the electoral process and give it more credibility and integrity.
“But you see, when you have not reached that stage where you could deploy the electronic transmission from every part of the country, then you have to be very careful. And no matter what anybody may say, you cannot have about 50 percent of Nigerian voters not participating or not getting their votes counted in elections and say it doesn’t matter, that we have to start the electronic transmission.
“We know the evils of not transmitting results electronically but compare the evils of electronically transmitting just half of the electoral votes from Nigerians and say you have elected a President with 50 percent only.
“And others have voted but their results or their votes could not be electronically transmitted. This is disenfranchising Nigerians and we are not going to support this kind of thing because essentially, we are supposed to be fair to every part of Nigeria and when we voted, every part of Nigeria voted for and against(the amendment).
“What I mean here is that you have Senators from the northern part of Nigeria who voted for electronic transmission. Maybe that is their belief or their environment is ready for electronic transmission. And you have Senators from the southern part of Nigeria who voted against the immediate deployment of electronic transmission but they support that the electronic transmission of results should be allowed after certain conditions are met and the conditions are simple: The National Communication Commission(NCC) had provided the technical information that only NCC could give – that only about 50 percent of the Nigerian environment, the polling units, in the country could possibly have their results electronically transmitted.
“So what happens to the other 50 percent. So we believe that all of us in the Senate were aiming at the same target but chose to go through different routes and that is why in my concluded remarks in the Senate after the debate and voting, I said there was no Victor, no Vanquish because we all meant well.
“And for those Nigerians who still feel that the electronic transmission should have just been allowed to take effect, I said well, this is how democracy works. Democracy is to allow those minority views to be expressed and democracy provides that the majority views will always prevail.”
The Senate President faulted some media reports that insinuated that only the APC Senators voted against the immediate application of the electronic transmission of results.
He said that the votes on the subject matter were cut across party lines and regional divides as both APC and PDP senators voters against the immediate electronic transmission of the result. He frowned at the idea of some people targeting only APC senators.