The National Bureau of Statistics (NBS) announced on 9 January 2025 the rebasing of Nigeria’s Gross Domestic Product (GDP) data from 2010 to 2019 because of “relative economic stability” compared to 2020, 2021 and 2022 following the International Monetary Fund (IMF) guidelines.
What is Rebasing?
Rebasing of a country’s Gross Domestic Product (GDP) refers to the process of updating the base year used for calculating GDP to reflect the current structure of the economy. The base year serves as the reference point for comparing economic output over time.
Imagine you’re measuring your height against a wall. If you haven’t marked your height since you were a kid, it wouldn’t be very accurate, right? Rebasing GDP is kind of like that. The NBS is essentially updating the reference point (the base year) used to calculate GDP to better reflect Nigeria’s current economic landscape. This shift from a 2010 base year to a 2019 base year brings our GDP measurements in line with the present structure of our economy.
Why is Rebasing Important ?
1.Reflects Current Economic Activities: It captures changes in the economy, including new industries, products, and services that did not exist or were not significant in the previous base year.
2.Improves Accuracy: Older base years may no longer accurately represent the economic structure, leading to outdated or incomplete data.
3.International Comparability: Rebasing ensures that GDP measurements align with international standards, such as those provided by the International Monetary Fund (IMF) and the United Nations.
The Technical Assistant to the Statistician General, Mr. Moses Waniko highlighted the following impacts of the rebasing:
1.The rebasing will facilitate the development of an Economic and Development Plan
2.It is expected to provide a positive trajectory for the economy.
3.There are anticipated changes in the size and structure of the economy post-rebasing.
4.The tax-to-GDP ratio may improve, and the debt-to-GDP ratio, currently at 18.5% as of September 2019, could decrease with a larger GDP.
5.Per-capita income is projected to rise after the rebasing.