Nigeria’s NBS plans to release rebased GDP figures in Q1 2025, moving the base year from 2010 to 2019. The rebasing aims to accurately reflect the modern economy’s structure, impacting indicators such as GDP size, per capita income, and government revenues. However, concerns remain about whether these changes will lead to real economic benefits for citizens amidst inflation and stagnant wages.
Nigeria’s National Bureau of Statistics (NBS) plans to unveil its rebased Gross Domestic Product (GDP) figures for the first quarter of 2025, the first update in over ten years. This rebasing process will shift the base year from 2010 to 2019 and includes sectors like technology and creative industries that have rapidly evolved. This update aims to reflect a more accurate economic structure and size, which could alter key economic metrics significantly.
The rebasing of GDP serves a dual purpose; it adjusts figures for modern economic activities while also impacting important measures like per capita income. Many Nigerians are questioning whether the rebased GDP will truly reflect improvements in living standards or if it will merely inflate economic indicators without real benefits. Current economic challenges, such as inflation and sluggish wage growth, cast doubt on the tangible outcomes of this rebasing for citizens’ daily lives.
Defining GDP rebasing, it’s the process of updating the reference year for calculating economic activities to accommodate structural changes and inflation adjustments. This practice is essential for accurate GDP representation and ensuring it captures the evolving contributions of various sectors. Previous rebasing efforts have significantly impacted the perception of Nigeria’s economy, highlighting sectors that have outpaced prior estimates.
As per IMF data, Nigeria’s GDP per capita has dramatically declined, illustrating substantial economic contraction. The value dropped from $3,022 in 2014 to $835.49 in 2024, with total GDP falling from $568.5 billion to $194.96 billion over the same period. With the upcoming rebasing, a revised GDP per capita is expected, which might offer a more favorable view of Nigeria’s income status, even if individual income remains stagnant.
The implications of GDP rebasing extend to key economic indicators. If the GDP increases significantly, the debt-to-GDP ratio could improve, easing perceptions of Nigeria’s public debt that stood at N142.3 trillion in September 2024. Despite that, high debt servicing costs will continue to affect government finances. The rebasing may also impact the current low tax-to-GDP ratio, emphasizing the urgency for tax reforms to enhance revenue generation.
Technical assistant to the Statistician-General, Moses Waniko, noted that rebasing allows for better economic planning and monitoring. This suggests that stakeholders expect changes in the economy’s structure and outcomes, such as improved GDP size and per capita income, following the rebasing process.
While statistical improvements may occur post-rebasing, real income growth in Nigeria faces several challenges. Rising income inequality means that GDP expansion may not benefit all citizens equally. The informal sector’s dominance complicates translating GDP growth into higher incomes. Additionally, high inflation and exchange rate volatility hinder how income growth translates into improved living standards.
To enable GDP rebasing to create tangible benefits, Nigeria’s policymakers need to prioritize enhancing wage levels and job opportunities. Essential measures include salary increases, support for sectors generating quality employment, and investing in infrastructure. Economics expert Aliyu Ilias emphasizes the need for comprehensive policy actions to stabilize GDP figures and ensure real income growth aligns with economic expansions.
Beyond statistical adjustments, Nigeria must implement strategic policies to address core economic issues to facilitate meaningful benefits from GDP rebasing. Investments in fundamental areas like education and healthcare will be critical in ensuring the growth advantages are equitably shared. As new GDP data is released, the focus should remain on real-life impacts rather than just numerical increases. GDP growth must correlate with improved wages, job opportunities, and living conditions for ordinary Nigerians to signify true economic progress.
In conclusion, Nigeria’s rebasing of GDP promises a clearer representation of the economy’s size and structure, especially considering the rapid growth of new sectors. However, underlying economic challenges such as inflation, income inequality, and stagnant wages must be addressed for the rebasing to translate into tangible benefits for ordinary Nigerians. Policymakers are urged to implement strategies that enhance real income growth and improve living standards, ensuring that GDP increases reflect genuine prosperity.
Original Source: punchng.com
