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What Nigeria’s 2025 GDP rebasing means    

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The National Bureau of Statistics (NBS) is set to rebase Nigeria’s Gross Domestic Product (GDP) this year, using 2019 as the new base year instead of 2010.

The base year for GDP calculations is being updated from 2010, which has been in use for the past 15 years, to 2019.

This means that constant prices previously based on 2010 will now be based on 2019.

On January 9, 2024, the NBS in collaboration with the Nigerian Economic Summit Group (NESG), organized a workshop to explain the rebasing process to market and media stakeholders.

Basing GDP against a benchmark of prices from a particular year over a duration of years to determine the GDP for current periods is known as rebasing.

The adjustment in the base year aims to provide a more accurate reflection of the current structure and activities of the Nigerian economy.

The 2025 GDP rates would be calculated with a new constant year that has now been selected instead of the usual 2010 that was adopted over 15 years ago.

According to Dr Baba Yusuf, Head of National Accounts at NBS during the panel session at the workshop, The GDP will be backcasted to 1981.

The base year is meant to change periodically, Dr. Moses Waniko stated clearly that the 2008 Systems of National Accounts recommends rebasing national accounts every five years and that NBS committed to adhering to this timeline moving forward.

The following outlines the rationale and process behind choosing 2019 as the base year according to the presentation by NBS:

The relatively stable year:

Dr Waniko stated that 2019 was a year of relative economic stability in Nigeria 2020-2022.

Data availability and relevance:

Major surveys, such as the Nigeria Living Standard Survey (NLSS), which gathers household and poverty data, were conducted in 2019.

Reflecting the evolving economy: 

Digital economic activities, significantly underrepresented in 2010, saw notable growth and were better captured in 2019.

Digital economic activities, significantly underrepresented in 2010, saw notable growth and were better captured in 2019.

The rebasing process includes extensive updates in the scope of economic activities captured, with particular focus on:

The GDP rebase using the new base year will increase the GDP value, while key economic metrics will change.

Moreso, a lower debt-to-GDP ratio may suggest that Nigeria can repay its debts without relying on further borrowing. However, this does not necessarily reflect the reality of the country’s fiscal health, given that the budget shows expenditures exceeding revenues.

The GDP rebase using the new base year will lead to an increase in GDP value. An increased GDP value could imply a higher standard of living for Nigerians.

A rise in the GDP per capita would suggest improved economic well-being. However, the limitation to the GDP per capital as regards portraying the standard of living is flawed because it does not take into consideration the cost of living.

The 2019 base year includes extensive surveys like the National Business Sample Census (NBSC) and the National Agricultural Sample Survey (2022), covering all sectors at national and state levels. In contrast, the 2010 base year included only 14 sectors.

Also, the surveys now provide a more comprehensive view of informal economic activities, which were previously underrepresented.

Furthermore, the rebasing captures activities in the digital economy, modular refineries, quarrying, and pension fund management, among others.

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