THE National Bureau of Statistics (NBS), said Nigeria’s quest to rebase its gross domestic product (GDP) is to reflect the actual size of economic growth recorded more than 10 years ago.
Rebasing of the economy, the statistics office said on Monday, January 20, is to be unveiled by this month’s end.
According to NBS, rebasing is a process of updating an old base year with a recent one to reflect changes in the prices of goods and services produced within the economy. The agency explained that constant price estimates are recalculated using the new base year’s prices.
The statistics office cited the need to capture changes in certain sectors of the economy and to reflect current consumption patterns, while also reflecting, the economic dynamics witnessed in the past few years.
Commenting further on the reason for the rebasing, the statistics office said some sectors of economy have experienced significant growth since the last GDP rebasing in 2014 and now require proper representation of their contribution to the economy in the latest reabasing exercise.
On the key sectors that have reflected growth which were not captured in the last rebasing exercise, the NBS listed marine economy, arts, culture and tourism, information and communication technology and e-commerce activities.
“Rebasing is a very vital exercise that ensures our economic indicators are accurate, reflecting the updated structure of our economy,” the statistician general and CEO of the NBS, Adeyemi Adeniran, said.
“It’s done to absorb the new ministries that the new government just created, upgrade the Consumer Price Index (CPI) basket and change the methodology of CPI and gross domestic product (GDP),” he added.
He stressed that another reason for CPI Rebasing is to bring the price reference period (Base Year) closer to the current period in other to have a relative price that shows current prices movement. In this regard, the Bureau is using 2024 as the base year for the CPI Rebasing.
Economic watchers said the rebasing is a strategy to woo upbeat investors into the Nigerian economy and furnish them with the right economic indicators.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele emphasised the significant benefits of the rebasing, including improved investor perception, adjustments to the tax-to-GDP ratio, and a more accurate measurement of per capita income.
“Rebasing the economy signals to investors that Nigeria is serious about reforms and provides a clearer picture of the country’s economic trajectory,” Oyedele said.
He highlighted the Consumer Price Index (CPI) rebasing as another critical component, which would offer a more precise understanding of inflation and its drivers.
A senior Investment Research Analyst, Felicia Awolope, who commented further on the rebasing said, “the rebasing will push up investors appetite in Nigeria’s equities market which recorded huge returns for investors in 2024. It will give investors clear indicators of the Nigerian economy.
“The actual size of the Nigerian economy will give investors the economic picture of where to invest and opportunities in the overall economy. It’s important investors are furnished with accurate data on the economy,” she said.
The ICIR reports that the rebasing in 2014 positioned Nigeria as Africa’s largest economy, however, findings have revealed drop to the fourth position by Nigeria, raising further worries about the actual size of Nigeria’s current economy.
It would be noted that following President Bola Tinubu reforms after he took office in 2023 by implementing the scrapping of the decades-old petrol subsidy and devaluing the naira currency in an effort to jump-start growth.
Tinubu’s reforms have worsened already high inflation and escalated a cost of living crisis in Africa’s most populous nation with most Nigerian households spending larger percentage of their earnings on feeding.
The statistics office further said consumption pattern in Nigeria have changed significantly since the last inflation rebasing in 2009. It plans to use 2024 as the new base year for inflation.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.