The Lagos State Government has called for the understanding and collaboration of the Organised Private Sector (OPS) and the Informal Sector in amassing the facts that would engender accurate and complete Gross Domestic Value of the State.
The Special Adviser to the Governor on Economic Planning and Budget, Mr. Lekan Balogun said the need to collate these records was because of the inaccurate and non-availability of data critical to some sectors in the Lagos economy for the computation of the Gross Domestic Product, (GDP).
Addressing stakeholders at a One-Day Forum with the Organised Private Regulatory bodies in Financial Institutions, Insurance, Telecommunication, and Trade and Allied Services sectors at the Ostra Halls and Hotels, Alausa, Ikeja, on Thursday, Balogun stated that responses previously gathered from GDP exercise shown gaps from OPS 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 pivotal role the private regulatory bodies play in maintaining ethical standards, ensuring compliance, and fostering innovation, the Special Adviser urged its representatives to actively engage in the discussions, share insights, and explore avenues for collaboration as the successful conduct of the exercise will further add value to governance in terms of informed plans and programmes, targeted at sustainable economic growth and development in contributing to the progress of the State’s Gross Domestic Product.
Charging the State government to be intentional and actively engage the informal sector in the GDP exercise, the State Manager of the Small and Medium Development Agency of Nigeria (SMEDAN) Lagos, Mr. Bunmi Kole-Dawodu noted that businesses in Lagos are above 50 million and where the strength of Lagos economy lies. He added that the activities or transactions by the medium and small businesses are not with proper documentation, which makes them informal.
The SMEDAN Manager expressed further, “The effects of the computation of the State GDP from the informal sector is that we underestimate the economic activity and this can lead to inaccurate representation of the true economic activities in the state. The informal sector can play a pivotal role in generating income for individuals and also people involved in informal activities may earn money through self-employment, street vending, unregistered business and then failing to account for earning income can result 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, failure to consider this employment or individuals in the sector can lead to an 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’s ability to raise tax revenue for government spending. Ignoring the informal sector in GDP calculation can lead to inadequate policy responses as Policymakers may not be aware of 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 said, “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 to understand 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) and Ms. Olamide Aiyeku, Statistics Department, CBN.