Kehinde Adeleye
The government of Lagos state is requesting the cooperation of both the Organised Private Sector and the Informal sector in order to gather accurate and complete data for the calculation of the state’s Gross Domestic Product (GDP).
The Special Adviser to the Governor on Economic Planning and Budget, Mr. Lekan Balogun, emphasized the importance of collecting this data due to the lack of accuracy and availability of critical information for certain sectors in the Lagos economy.
During a One-Day Forum with regulatory bodies in various sectors, Balogun revealed that previous efforts to gather GDP data had revealed gaps in information from both the Organised Private Sector and the Informal businesses.
He said, “This meeting will assist in understanding and deployment of a sectoral specific approach to GDP data gathering to address the data gaps due to the non-availability of data critical to some sectors in the Lagos economy.
“The outcome of previously conducted GDP exercise revealed wide gaps in terms of responses and data returns from Organised Private Sector, Formal and Informal businesses as well as allied multinationals.”
While acknowledging the significant role played by private regulatory bodies in upholding ethical standards, ensuring compliance, and fostering innovation, the Special Adviser urged their representatives to actively participate in discussions, share insights, and explore opportunities for collaboration.
This participation will enhance governance by providing informed plans and programs that contribute to sustainable economic growth and development, thus adding value to the state’s Gross Domestic Product (GDP).
In line with this, the State Manager of SMEDAN Lagos emphasized the importance of involving the informal sector in the GDP exercise. He pointed out that the strength of the Lagos economy lies in its 50 million businesses, many of which operate informally without proper documentation.
Computation of the state’s GDP without including the informal sector leads to underestimating economic activity and creates an inaccurate representation of the true state of the economy.
The informal sector can contribute significantly to income generation through self-employment, street vending, and unregistered businesses. Failing to account for this income results in an incomplete picture of the state’s GDP.
“The sector is a significant source of employment especially in developing countries like ours. When individuals rely on these informal activities as their primary source of income and failure to consider this employment or individuals in the sector can lead to inaccurate assessment of the State labour market and employment rate.
“The informal sector activities generally go unreported like businesses on wheelbarrows, they earn money but there is no record of taxes, no record of so many things but they are making a hell of money. So, as regards taxes, this can result in lower reported GDP and hinder the government ability to raise tax revenue for government spending. Ignoring the informal sector in GDP calculation can lead to inadequate policy responses as Policy makers may not be aware about the needs and challenges of those engaged in informal activities,” he said.
The Permanent Secretary, Ministry of Economic Planning And Budget, Mr. Ibrahim Obajomo in his address noted that, “the conduct of the Gross Domestic Product (GDP) had been carried out exclusively by the National Bureau of Statistics (NBS) until recently, when the need to quantify the size and structure of the States’ economy became a worthwhile and prominent demand with a view to understanding the economic-dynamics of the Country as well as areas of comparative advantage by the State.”
Other Speakers at the forum were: Dr. Olusegun Vincent, Associate Professor, Pan-Atlantic University; Mr. Thompson Akpabio, Director, Legal, Regulatory & Taxation, NECA; Dr. Biodun Adedipe, Chairman, Economics & Statistics, Lagos Chamber of Commerce and Industry (LCCI); Chief Ofili, Retired Director, National Accounts, National Bureau of Statistics (NBS); Ms. Olamide Aiyeku, Statistics Department, CBN.
