The National Bureau of Statistics plans to revamp Nigeria’s GDP figures, shifting the base year to 2019, aiming to better reflect the economy’s current state. This rebasing could significantly alter per capita income and the debt-to-GDP ratio, although there are concerns about whether these changes will yield real benefits amidst ongoing inflation and stagnant wages. Effective policy reforms are essential to translate this revised GDP into meaningful economic growth for ordinary Nigerians.
The National Bureau of Statistics in Nigeria is set to unveil the rebased Gross Domestic Product (GDP) figures for the first quarter of 2025, a revision that has not occurred in over ten years. This rebasing shifts the reference year from 2010 to 2019 and incorporates rapidly growing sectors such as information technology, digital finance, and the informal economy, providing a more representative view of Nigeria’s economic landscape.
The rebased GDP assessment is expected to influence key metrics such as per capita income, debt-to-GDP ratio, and tax revenue projections. As the figures are recalibrated, there is ongoing concern among Nigerians regarding whether these changes will yield tangible benefits, especially during a time of high inflation and stagnant wages.
Understanding GDP rebasing entails appreciating its role in adjusting the base year for calculating economic activity to reflect current realities, including structural changes. The last adjustment in 2014 notably increased Nigeria’s GDP and shifted its status to the largest economy in Africa.
The anticipated updates from the rebasing process are likely to reflect the increased significance of sectors that have recently contributed to economic output, such as telecommunications and the creative industries. This reassessment seeks to ensure GDP figures accurately encapsulate modern economic contributions, thereby enhancing fiscal planning processes.
The rebasing is also projected to ameliorate Nigeria’s GDP per capita, which has seen a notable decline, falling from $3,022 in 2014 to $835.49 in 2024. If the GDP figures increase post-rebasing, per capita income could rise, potentially altering international classification of Nigeria’s income status despite the reality of stagnant wages for most citizens.
A greater GDP size could positively affect Nigeria’s debt-to-GDP ratio, giving the illusion of improved debt manageability. However, a higher GDP does not eliminate high debt servicing costs, which currently consume a significant proportion of government revenues and underscore the need for effective tax reform.
During a workshop, Moses Waniko, the technical assistant to the Statistician-General, noted that rebasing has implications for economic planning and anticipating changes in economic structure. He emphasized that increased GDP size may also result in an improved debt-to-GDP ratio.
Real income growth challenges may persist despite statistical improvements. Income inequality remains a significant barrier, as many Nigerians face stagnant wages and limited opportunities, particularly in the informal sector. Additionally, persistent high inflation and exchange rate volatility diminish the potential benefits of any GDP growth.
Policy reforms are crucial to ensure that GDP rebasing translates to meaningful real income increases. Boosting wages, employment rates, and reinforcing social safety nets will be vital. Aliyu Ilias stated that reversing the decline in GDP per capita necessitates immediate policy intervention focusing on production, trade balance, and security.
Furthermore, investing in infrastructure, education, and healthcare can bolster economic growth benefits. Therefore, the upcoming rebased GDP figures must align government economic policies with citizens’ needs, ensuring that any increases in GDP are reflected in their daily living standards. As the NBS prepares this release, it is essential for Nigerians to evaluate beyond superficial metrics and demand substantial economic progress that enhances quality of life.
The upcoming rebasing of Nigeria’s GDP is anticipated to provide a more accurate representation of the nation’s economic realities. While it may indicate increased GDP size and per capita income, these changes must result in real improvements in living standards for Nigerians. Policymakers must prioritize wage growth, job creation, and essential services to ensure that economic growth translates into tangible benefits for the populace, reflecting a genuine enhancement in quality of life instead of mere statistical adjustments.
Original Source: punchng.com
