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10 key claims about Nigeria’s economy that we fact-checked in 2021 – and why we did

Nigeria’s position as Africa’s largest economy means that its successes – and woes – are widely followed.

Here, we highlight ten economy-related claims we fact-checked in 2021, and why we took a closer look

1. Over 40 million businesses have closed down in Nigeria since 2015

In April, the social networking platform Twitter announced its first Africa office would be in Ghana, not Nigeria. This sparked a debate about the country’s business environment between the ruling All Progressives Congress (APC) and the main opposition party, the Peoples Democratic Party (PDP). 

The PDP, which lost power in 2015, claimed that over 40 million businesses had closed down in the six years of APC rule since. 

But the most recent survey of micro, small and medium enterprises, published in 2019, showed that there were 41.54 million small businesses in Nigeria. Of these, 97.8% were unregistered.

While this makes the PDP’s claim unlikely to be accurate, we could not find any other data that completely disproved it and therefore rated it unproven.

Why we checked this

Entrepreneurship has been identified as one of the ways to solve Nigeria’s unemployment challenge, with the government introducing various incentives for small businesses.

Such a mass closure of businesses would mean that Nigeria’s unemployment rate and other economic indices would worsen. Accurate public debate would help surface more ideas and better policy.

2. Nigeria has become the world poverty capital under the APC’s watch 

The PDP also blamed the APC government for worsening poverty in Nigeria. The PDP was in office between 1999 and 2015.

A much-cited running counter, the World Poverty Clock, did find that in 2018 the number of Nigerians living in extreme poverty exceeded those in India. This is defined as living on less than US$1.90 a day.

The 2019 poverty and inequality report published by the National Bureau of Statistics estimated that over 82.9 million Nigerians (about 40% of the population) were living below the national poverty line. 

According to the national data office, individuals living in households with an annual consumption of less than N137,430 ($333.8 at the official exchange rate) are considered poor by national standards. 

However, economists told Africa Check that the PDP’s claim was misleading because economic issues like poverty built up over time and one regime could not be blamed for the high poverty rate.

Why we checked this

Political figures often use data to score points. However, data must be used correctly because it tells the story of real people and also creates room for informed policy solutions.

3. Nigeria’s current status as Africa’s largest economy was achieved under president Muhammadu Buhari

Not to be outdone, the APC claimed Nigeria’s status as the continent’s largest economy was achieved under administration of its leader, president Muhammadu Buhari.

This was however incorrect because Nigeria was officially declared Africa’s largest economy in 2014. This was when the national statistics office adjusted how it calculated its gross domestic product (GDP), a commonly used measure of the size of an economy. Buhari took office in 2015.

Why we checked this

The GDP is the total monetary value of all goods and services produced in a country within a specific time period, usually a year. According to the International Monetary Fund, while GDP is not a measure of the overall well-being of a country, workers and businesses are better off when the GDP is growing.

4. Nigerians abroad are greatly subsidising the annual federal budget

A diaspora union claimed that the money sent back home by Nigerians living abroad was important because it greatly subsidised the country's budget.

Experts told us that this claim was incorrect because diaspora remittances did not go to the federal government’s coffers or add to foreign exchange earnings. Remittances did help to improve the welfare of the citizens, who tended to spend the funds on consumption, which was good for the economy.

Why we checked this

The sources of government funding are important because it determines the resources available to cater to the needs of citizens.

5. Agriculture accounts for almost 50% of the Nigerian economy 

An online publication claimed that agriculture accounts for 50% of Nigeria’s economy and the economic crisis can be traced to “rampant destruction of farmlands”.

We rated this claim as incorrect after data from the national statistics office showed that agriculture contributed 26.21% in 2020. Historical data also showed that agriculture has not accounted for 50% of Nigeria’s economy in over 10 years.

Why we checked this

Discord between farmers and cattle herders has affected agricultural output in Nigeria. 

It is important to use accurate data to put things into perspective and understand the potential implications of the clashes between farmers and cattle herders.

6. Nigeria’s economic diversification strategy is on course with a persistent increase in non-oil sector contribution to GDP 

In his speech marking the country’s 61st independence anniversary, Buhari said the plan to diversify the economy was on course. This was evident, he said, by the sustained increase in the non-oil sector’s contribution to GDP.

This claim was incorrect. Data from the National Bureau of Statistics showed that the non-oil sector’s contribution to GDP has fluctuated almost every quarter and not grown persistently.

Why we checked this

Economic diversification has been highlighted as an important task for the Nigerian government because of its reliance on revenue from crude oil sales. The government’s revenue – and planning – is usually significantly affected when crude oil prices fall on the global market.

7. Transport minister said the southeast will be excluded from rail projects 

A post shared on social media claimed that Nigeria’s minister for transportation Rotimi Amaechi said the country’s southeastern states will be excluded from all rail projects if a secessionist campaign in the region continues.

The claim was false, with the minister disavowing it. In 2021, the government also approved a rail project that connected all the five states in the southeast to other parts of the country.

Why we checked this

Stoking ethnic tensions, including through resource allocation, can lead to conflict.

8. Nigeria’s government has borrowed N6.16 trillion from the country’s pension fund

In September, a message circulated on WhatsApp claiming that the pensions of civil servants were at risk because the government had borrowed from their pension fund. 

The message advised workers to make alternative retirement plans because “very soon, there will be no pension again”.

The claim was false. Economists said the funds were invested in government securities by fund administrators who managed the pension scheme and were safe.

Why we checked this

Many civil servants rely on their pensions after retirement. A false message like this one, if left unchecked, can cause panic.

9. Oyo state governor praises revenue record

In June, Oyo state governor Seyi Makinde’s office claimed he had increased internal revenue by N15 billion in his first two years in office. 

Available data showed the governor’s administration grew internally generated income by N11.7 billion, at least N3 billion short of the claim.
Despite this, analysts said there was no doubt Makinde had improved the state’s finances, building on a trend that started before he took office.

But the experts said this was not a cause for celebration as the state still struggled to meet its obligations independent of allocation from the federal government.

 Why we checked this

An improved internally generated revenue base provides stability and certainty to states, with the financial health benefits going beyond just the state.

10. Twitter has 40 million users in Nigeria 

In June, the Nigerian government suspended Twitter, a popular microblogging platform. In the ensuing debate it was widely reported by national and international media that Twitter had 40 million users in the country.

We traced the figure to a survey by a local polling company. But it was inaccurate, with statisticians faulting the survey’s methods.

Available data showed that the number of Twitter users in Nigeria was around 3 million.

Why we checked this

Social media is an important feature of the world today. The suspension of Twitter’s operations caused an uproar in Nigeria and it was important to put the implications of the suspension into perspective.

Further Reading

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