Adding to the President’s commentary this morning on the non-oil GDP growth and the drivers of that growth, I wish to add a few important points that are often missing from the public discourse.
First, the national budget must be assessed relative to the size of the economy, not merely in nominal terms. Government expenditure today accounts for about 20% of GDP, down sharply from a high of roughly 60% in the 1990s, and about 30% during the APNU period (2015–2020). This is why I deliberately stay away from the hyped narrative of “the largest budget in history.” In relative terms, it is in fact one of the smallest budgets when measured against the size of GDP, which is the more economically meaningful way to assess fiscal scale, sustainability, and macroeconomic impact.
Second, the non-oil economy is not stagnant or crowded out — it is expanding. Since oil production began in 2019, non-oil GDP has doubled, driven by expansionary policy and public investment aimed at rebuilding productive capacity, especially after non-oil activity contracted sharply in 2020.
Consistent with this expansion, non-oil revenue has also more than doubled, broadly tracking the pace of non-oil output growth. Importantly, this has occurred alongside major tax relief measures, reinforcing that the revenue gains are being driven primarily by expanded economic activity, not higher tax rates.
Third, at the sector level, the story is both broad-based and structurally transforming. Even though non-oil GDP has doubled, the shares of agriculture (just over 20%), manufacturing, and other sectors have remained relatively stable — indicating broad-based expansion across the non-oil economy. The key structural shift has occurred in services, which more than doubled its share of non-oil GDP from approximately 7% to 15%. This is a clear signal of real structural transformation underway in the non-oil economy, driven by government policy and investment designed to expand capacity, modernize the economy, and strengthen diversification.