gross domestic product
Gross domestic product is the total value of everything a country produces in a year, and it is the usual measure of whether an economy is growing.
In plain English
GDP is the number politicians quote and almost nobody understands, and both of those facts are worth fixing.
It adds up the value of everything produced in a country over a period. Every barrel of oil, every bag of cement, every haircut, every software contract. If the total is larger than last year, the economy grew. If it is smaller for two quarters running, that is a recession.
What it does not tell you is who got the growth. An economy can grow strongly while most people feel poorer, because the growth was concentrated somewhere they are not. Nigeria has lived through exactly this more than once, which is why GDP figures often feel insulting to people whose lives got harder in the same year.
It also ignores anything unpaid, which in Nigeria is enormous. The informal economy, the trading, the work done in homes. Vast amounts of real activity are simply invisible to the number.
So treat GDP as one instrument on the dashboard rather than the whole dashboard. It tells you the direction of the machine. It tells you nothing about whether you are in a comfortable seat.
Nigeria's GDP grows 3 percent in a year while inflation runs at 28 percent. The economy technically expanded, and the average person could still afford noticeably less than the year before. Both statements are true.
Questions people ask
What is GDP per capita?
GDP divided by the population, which gives a rough sense of output per person. It is more useful than the headline figure, and still hides how unequally that output is shared.
Why does GDP growth not feel like growth?
Because growth can be concentrated in a few sectors, and because inflation can wipe out the gains for ordinary households. Both happen frequently in Nigeria.
Is GDP a good measure of wellbeing?
Not on its own. It ignores unpaid work, environmental damage and how income is distributed, which is why economists increasingly look at other measures alongside it.
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