Theory question 110
National IncomeSection B: answer three questions only from this section.
Identify the likely problems that can be encountered in the compilation of National Income Account in Nigeria.
Show the model answer
Inadequate and unreliable statistical data
Large subsistence (non-monetised) sector whose output is not recorded
Danger of double counting intermediate goods
Difficulty in valuing depreciation and inventories (stocks)
Price changes (inflation) make values hard to compare
Problem of valuing self-provided and unpaid services (e.g. housewives)
Illiteracy: many people keep no records of income
Tax evasion leads people to under-declare income
Difficulty in estimating net income from abroad
Classification problems: deciding which goods are final and which are intermediate; treatment of transfer payments
Explain at least five problems, with Nigerian examples.