Ask a politician how the economy’s doing, and they’ll point you to a number. GDP’s up 2%. Or maybe it’s down 0.5%. Cue applause or panic, depending on the spin of the day. But here’s the thing: that number doesn’t actually tell you what matters.
GDP has been inflated into a symbol of prosperity, yet it’s no measure of well-being. You want to know if a country is genuinely prospering? Ask if people are saving, investing, building real wealth, and seeing their living standards rise. GDP won’t answer those questions.
Because in GDP’s world, the government spends – and the crowd cheers.
If the state taxes 1 billion rand from businesses, wastes it on padded contracts or parades, then borrows 2 billion more to repeat the circus, GDP climbs. It makes no distinction between productive enterprise and political redistribution. As long as money moves, GDP calls it “growth.”
GDP loves disasters; you shouldn’t
Flood hits, roads wash away, homes destroyed. Money flows into rebuilding. GDP rises.
But what was lost? In wealth? In security? In years of productivity? GDP doesn’t record the destruction, only the reconstruction. This is the broken-window fallacy in national dress: wars, disasters, even bloated public works all boost GDP but don’t make life better – they often make it worse.
Real growth doesn’t come from spending. It comes from saving and producing.
Yet GDP ignores that. Governments pump demand with stimulus, inflate credit, and declare victory. Meanwhile, the foundations of real growth – capital formation, sound money, trust – are quietly eroded.
Then comes inflation, distorting the whole picture.
Headlines trumpet: “Real GDP grows 5%.” Meanwhile, your paycheck buys less than last year. Why? Because “real GDP” is nominal GDP adjusted for inflation – and those inflation numbers are whatever the government says they are. A statistical trick.
Which leads us to the darker truth no one likes to say out loud: what if the numbers themselves are fake?
The “trust-me-bro” problem
People behave as if governments couldn’t possibly fabricate GDP or CPI figures. But why wouldn’t they? What government wants to make itself look bad?
Even if it isn’t deliberate fabrication, what about incompetence? In Nigeria, the same state that struggles to run elections, build roads, fix power, or protect citizens is somehow expected to flawlessly measure the production of an entire economy.
In 2014, Nigeria’s GDP jumped 89% overnight[i] – not from a boom in wealth but from “rebasing” the calculation. More recently, rebasing CPI numbers in 2025 magically shaved headline inflation down from over 34% to around 24% – not because people’s grocery bills fell, but because the weight of food in the index was lowered. That’s not relief. That’s creative accounting.
Even in rich countries, the numbers wobble. The US once “found” 258,000 jobs that didn’t exist, then erased them in a revision[ii]. In Britain, inflation was overstated thanks to a botched car tax input[iii]. If America and the UK – with endless staff and tech – can’t keep their books straight, what are the odds South Africa or Nigeria, with weaker systems, are nailing it?
In South Africa, census undercounts have left millions of people unrecorded. Globally, satellite night-light data has shown authoritarian regimes routinely exaggerating GDP growth compared to reality on the ground.
So, it’s not entirely impossible that there’s one guy in a room making things up, and history shows we’d be naïve to think otherwise.
Nigeria and South Africa: GDP up, reality down
Nigeria posts positive GDP numbers. International institutions forecast more growth. Yet, inflation is rising, transport and energy costs soaring, electricity unreliable, savings shrinking, and businesses folding. For the average Nigerian, “growth” is a cruel joke.
South Africa’s story isn’t much different. GDP rebounds on paper, forecasts glow – but Eskom collapses, youth unemployment is crushing, wages stagnate while prices climb, crime scares away investors. If this is “growth,” it’s growth that never reaches the street.
GDP may be up, but daily life is deteriorating.
On what should we focus instead?
If we want to know whether an economy is working, we should be asking:
Are people saving more?
Are businesses expanding without state crutches?
Are prices stable?
Is capital flowing into productive use?
Are entrepreneurs free to operate?
Are wages rising faster than inflation?
These questions get at the truth. GDP never will.
Policy for real prosperity
Nigeria and South Africa must break the GDP fetish. Chasing that number creates perverse incentives – like bloating government spending to fake “growth.” It distracts from fundamentals.
What’s needed instead is simple:
Cut red tape and unleash enterprise.
Restore trust in money.
Protect savings and investment.
Remove barriers to trade.
Let capital formation drive production.
You’ll know it’s working not because GDP ticks upward, but because people build wealth, find jobs, and live better lives.
GDP isn’t the solution – it adds to the confusion and obsessing over it while reality crumbles is the surest way to measure yourself into ruin.
Econ Bro (@EconBreau and @EconBreau2 on Twitter/X) is a Nigerian Austrolibertarian economist and an apprentice at the Mises Institute. Under the organisation name “The Freedom Institute” he teaches individual liberty, personal responsibility, private property rights, free markets, and sound money to mostly young people across Nigeria. Econ Bro is an Associate of the Free Market Foundation.
[i] https://www.economist.com/the-economist-explains/2014/04/07/how-nigerias-economy-grew-by-89-overnight
https://time.com/93675/data-statistics-indicators-economy-gdp/
[ii] https://africa.businessinsider.com/politics/the-bls-does-have-a-jobs-data-problem-but-its-not-what-trump-says/wfk8c7q
https://apnews.com/article/bls-staff-react-to-commissioner-firing-e9754152b2a26f575c3492d85e06b8d3
[iii] https://www.reuters.com/world/uk/uk-car-tax-error-overstated-inflation-by-10-basis-points-ons-says-2025-06-05/
 | A guest post by
|