A development economist, Kazeem Bello, has said the response by the Nigerian presidency to the president of the African Development Bank (AfDB), Akinwumi Adesina, on the state of the Nigerian economy is wrong.

Bello said the rebuttal by the presidency exposed its  “poor understanding of the economy.”

Bello, the chief executive officer/principal partner with Afrique Capital and Equity Funds Ltd, New York, United States, told The ICIR that he would have expected the presidential spokesperson to check with professionals before issuing a rebuttal.

He said the response by the presidential aide, Bayo Onanuga, exposed “his ignorance and perhaps bias against any talk on the economy as it relates to this government.”

What Adesina said

On May 2, Adesina reportedly said that with a current gross domestic product (GDP) per capita of $824, Nigerians were significantly worse off than they were in 1960, when it was $1,847.

The outgoing AfDB president was further quoted as saying that despite Nigeria being Africa’s largest economy by GDP, its economic structure remained deeply flawed and unsustainable.

Onanuga’s rebuttal

In a rebuttal by Onanuga on Monday, May 5, the presidency faulted Adesina’s position that Nigerians were worse off today than they were in 1960.

Onanuga criticised both the data cited by Adesina and the conclusions drawn from it.

Among others, he said Adesina’s claim that Nigeria’s GDP per capita was $1,847 in 1960, compared to the current $824 was inaccurate and not supported by historical data.

He argued that Adesina should know that GDP per capita was not the only criterion used to determine whether people live better lives now than in the past, adding that it is a poor tool for assessing living standards.

“Its primary usefulness is in giving us the metrics to compare economic output in a country or between countries.

“GDP masks many activities in a country’s economy. It neither discloses wealth distribution nor income inequality nor accounts for the informal economy, which experts have said is enormous. It does not account for subsistence farming or income transfer from one family member to another,” Onanuga said.

Economist view

Sharing his thoughts on the matter, Bello explained that Onanuga misinterpreted the issue, adding that Adeshina did not say that Nigeria’s GDP in 1960 was $1,847.

The economist maintained that there was no way that it could be possible.

“Norway has one of the highest PCIs in the world for such a long time, and today it is reported at over $100,000 based on its population. The same Norway had a PCI of $9,770 in 1960.

“So, how could Nigeria at that time have recorded a PCI of $1,847 in 1960. What Mr Onanuga should understand, and this can be excused because he’s making a literary comp-analysis of PCI, while on the other hand, Dr. Adesina is using comp-analysis based on relative time value proposition.”

He said Onanuga’s analysis was based on a linear time value algorithm of exchange rate parity between what the exchange rate is today in relative time and what it should have been in 1960 for Nigeria, but that Adesina based his reference on relative time-value analysis.

“That suggestion simply means that at the current period,  if we reference back to 1960 based on the relative exchange parity difference, the PCI of Nigerians will be $1,847 in 1960 which means with even the $93 as projected by Mr Onanuga literal analysis, Nigerians then are enjoying the standard of living worth $1,847 today. That is what Dr Adesina is referring to based on relative time-value analysis.

“There is therefore a mix-up in the interpretation of Dr. Adesina’s assertion or numbers. He never says Nigerians PCI was $1,847 in 1960 because there was no way that could have been the case,” Bello submitted.