The Digest:
The National Bureau of Statistics (NBS) has officially rebased Nigeria’s GDP to N372.82 trillion. This update, representing a 41.7% increase, ensures that economic data better reflects the current realities, including emerging industries.
Key Points:
- What is GDP Re-basing? Rebasing is the process of updating the method used to calculate a country's gross domestic product (GDP) or other economic output. A new base year is selected to account for structural changes and the growth of key sectors. This helps provide a more precise and more accurate measure of financial performance.
- New Sectors Included: The rebased GDP now captures industries like digital economy, modular refineries, and social insurance schemes, which weren’t fully considered before.
- Why is it Important? Rebasing keeps economic data up-to-date. Without regular updates, GDP figures can be misled by either overstating or understating a country’s real economic size. It helps businesses, government, and stakeholders make informed decisions.
- Impact on Economic Growth: By incorporating new industries, the rebased GDP offers a more accurate representation of Nigeria's economic progress, highlighting which sectors are growing and making significant contributions to the economy.
- Rebasing Helps Policy Makers: It enables the government to plan more effectively and make more informed decisions in sectors such as taxation, budgeting, and economic development.
- Does it Affect Inflation or Prices? While rebasing doesn’t directly impact inflation, it helps to understand better economic trends, including how prices are shifting across sectors.
- Rebasing as a Global Best Practice: Most countries rebased their GDP every 5-10 years to stay aligned with economic changes. It helps Nigeria maintain global economic competitiveness.
Rebasing Nigeria’s GDP ensures that the economic data is accurate and relevant to today's growing sectors. It enhances economic planning and supports future growth strategies.
Sources: NBS, Nairametrics
