An economic analyst, Paul Alaje, has backed the President of the African Development Bank (AfDB), Akinwumi Adesina, over his recent comments on Nigeria’s economic decline, stating that Adesina’s presentation took into account the relative value of the dollar and macroeconomic indicators.
Speaking on the Monday edition of Channels Television’s Politics Today, a current affairs programme, Alaje said critics who interpreted Adesina’s comments in absolute terms missed the key economic context.
According to Alaje, Adesina’s analysis is grounded in macroeconomic reasoning. “To hold such a position as AfDB President, he must have taken into cognisance the relative value of the dollar, inflation, and poverty levels,” he said.
He acknowledged that the Special Adviser to the President on Information and Strategy, Bayo Onanuga, was not entirely wrong in quoting Nigeria’s historical GDP per capita figures, but said the debate should go beyond statistics.
“Yes, Mr Onanuga is also not wrong when you look at the figures absolutely. But that’s only part of the story. What matters more is: what could that income buy? What was the inflation rate? What was the exchange rate? These are the deeper questions,” Alaje said.
“We need to be mindful of the fact that more Nigerians are living in poverty today than in 1960. The numbers are clearer. It’s not a matter of who is right or wrong; what matters is how we can work together to improve the country’s economic reality.”
“The GDP in Nigeria, from available information according to Bayo Onanuga, was around $100 per capita in 1960. Today, it is about $800. But I do not fault Mr Adesina because, in economics, we do not take such figures at face value,” Alaje said.
Relative Value Matters
The analyst added that GDP per capita must be assessed in relative, not absolute, terms, considering inflation, purchasing power, and the economic conditions at each point in time.
“When you look at the economic context of 1960, $100 then had a significantly higher purchasing power than $800 today. Economists are very careful not to compare figures in absolute terms. What matters is what that money could buy then compared to now,” he explained.
Alaje further noted that the dollar in 1960 was backed by gold, making its value more stable and stronger than the fiat currency of today.
“The dollar at that time was based on the value of gold. In today’s terms, that $100 would be worth far more. So, when Dr Adesina makes his point, he is speaking from an informed position as an economist,” he said.
Presidency’s Counter
Earlier on Monday, the Presidency faulted Adesina over his statement that Nigerians were better off economically in 1960 than they are today.
Onanuga, in a post on X (formerly Twitter), accused Adesina of speaking “like a politician in the mould of Peter Obi” and failing to conduct proper research.
“Adesina spoke like a politician and did not do due diligence before making his unverifiable statement,” Onanuga wrote.
Adesina, during a keynote address at the 20th-anniversary dinner of Chapel Hill Denham, said Nigeria’s GDP per capita had dropped from $1,847 in 1960 to $824 in 2023. He used this data to argue that living standards had declined.
But Onanuga countered this claim, stating that the quoted figures were inaccurate. He said Nigeria’s GDP in 1960 was $4.2 billion, and the per capita income, for a population of 44.9 million, was $93—not $1,847.
“Our country’s GDP did not rise remarkably until the 1970s. In 1980, per capita income reached $880 and rose to $2,187 in 1981 before dropping again,” Onanuga added.
He criticised GDP per capita as a sole measure of well-being, arguing that it fails to reflect access to healthcare, education, infrastructure, and the scale of Nigeria’s informal economy.
“No objective observer can claim that Nigeria has not made progress since 1960,” he said. “We now have more schools, better road networks, more medical facilities, and near-universal access to mobile phones and digital services.”
Onanuga stated that GDP per capita masks the true depth of the economy and should not be used in isolation to assess quality of life.
