KEY POINTS
- Nigeria will rebase GDP and inflation data to reflect recent growth.
- Economic reforms have driven inflation but aim to spur growth.
- Updated metrics could bolster Nigeria’s appeal to foreign investors.
Nigeria is gearing up to rebase its Gross Domestic Product (GDP) and inflation data by the end of this month, aiming to better capture recent economic shifts and changing consumption patterns.
The National Bureau of Statistics (NBS) made this announcement on Monday, emphasizing the need to update the representation of rapidly growing sectors, such as the marine economy, arts, culture, tourism, information and communication technology, and e-commerce.
According to Reuters, the last GDP rebasing in 2014 positioned Nigeria as Africa’s largest economy. This year’s exercise could have significant implications for presenting Nigeria as an attractive investment destination.
Reflecting new economic conditions
The NBS explained that several sectors have experienced substantial growth since the 2014 GDP rebasing, necessitating more accurate representation.
The rationale for this update is to bring out new structures in the Nigerian economy and provide a better economic picture.
Also, to enhance the quality of the inflation measurements, the NBS intends to set 2024 as a new base for the calculation instead of the current 2009.
This change will not only help to mitigate such risks but also recognise fundamental changes in such consumers’ behaviours and pricing trends in the past decade.
Economic reforms and inflation challenges
President Bola Tinubu’s administration has implemented bold economic reforms since taking office in 2023, including the removal of a decades-old petrol subsidy and the devaluation of the naira currency.
While these measures aim to stimulate economic growth, they have also exacerbated inflation and deepened Nigeria’s cost of living crisis.
Nigeria’s inflation rate reached 34.8 percent in December, up slightly from 34.6 percent in November, with food and non-alcoholic beverages contributing most significantly to price pressures.
Tinubu expressed optimism in his December budget speech, predicting that inflation would fall to 15 percent this year, driven by reduced petroleum imports.
Global positioning and investment potential
Analysts have opined that this ‘GDP rebasing exercise’ may be used as a tool to boost up its argument for equipping foreign investment.
With foreign capital fleeing due to recent economic instability, the updated economic data could help attract renewed interest in Nigeria’s markets.
The rebasing is also considered a strategic tool for explaining the capabilities and the impact of the long-term growth of Nigeria.
To achieve this objective of replacing the industries and updating the measures of inflation, the country aims to present a realistic picture of its economy to the international community.
