Business & Economy
Rebasing the Nigerian Economy: The Likely Outcome Global Economy
Between 2010 and 2019 , a period of about 9 years, must have understandable changed the structure of the Nigerian economy.
EDITOR’S PICK
- Real Reason Buhari Snubbed APC NEC Meeting
- Rema, Ayra Starr, Mercy Chinwo Shine at 2025 Trace Awards
- Ex-Speaker Obasa Storms Lagos Assembly with Armed Officers
Generally speaking ,GDP rebasing would mean updating the base year used to calculate the Gross Domestic Product (GDP) to reflect current economic realities.
When Nigeria last rebased its economy in 2014, updating the base year from 1990 to 2010, it led to a significant increase in the reported GDP. It is reasonable to assume therefore, that as Nigeria undertakes another rebasing exercise, there are few things to expect.
First of all there will be a likely increase in GDP Size. The economy may appear larger than previously reported due to the inclusion of new and fast-growing sectors like fintech, e-commerce, entertainment, and digital services.
This does not necessarily mean increased economic prosperity but provides a more accurate picture of Nigeria’s economy.
There will also be a sectoral shifts in economic contribution.
Technology, telecommunications, and entertainment (e.g., Nollywood, digital startups) will have a greater share of GDP.
Agriculture and oil & gas may have a reduced percentage contribution as newer sectors gain prominence.
Informal sector activities, which are often underestimated, may be better captured.
Changes in Economic Indicators is also likely thing to happen.
For example , Debt-to-GDP ratio may improve, making it seem like Nigeria has more fiscal space to borrow, although debt servicing costs remain a key concern.
Similarly Per capita income may increase, though this won’t necessarily mean improved living standards if inflation remains high.
The Implications for Policy and Investment are also worth mentioning here.
Foreign investors may be attracted to newly highlighted sectors that were previously underreported.
The government may adjust fiscal and monetary policies to better align with the rebased economy.
Taxation policies may be reviewed, especially if certain high-growth sectors are found to be under-taxed.
Yet this may affect the potential reclassification of Nigeria’s economic status;
Foe example depending on the new GDP size, Nigeria may be classified differently in global economic rankings.
If GDP grows significantly, Nigeria may move closer to upper-middle-income status, affecting eligibility for concessional loans and development aid.
In all these however there are challenges to Consider One, rebasing does not solve economic challenges such as inflation, unemployment, and poverty—it only provides a clearer economic picture.
Secondly, If not properly communicated, it may lead to public misunderstanding, with people expecting instant economic benefits.
FURTHER READING
- Nedu Wazobia Slams VeryDarkMan Over Hard Drugs, Fraud Accusations
- NYSC Member Kidnapped on Benin-Ore Expressway
- Supreme Court Dismisses Army Appeal, Upholds Major Oseni’s Acquittal
Rebasing therefore will provide a more accurate reflection of Nigeria’s economy, likely revealing a larger GDP size and shifts in sectoral contributions.
However, the real impact depends on how policymakers use the new data to drive economic reforms, improve employment, and tackle inflation.
Olodo is public commentator based in Abuja.
Click here to watch video of the week
Advertise or Publish a Story on EkoHot Blog:
Kindly contact us at [email protected]. Breaking stories should be sent to the above email and substantiated with pictorial evidence.
Citizen journalists will receive a token as data incentive.
Call or Whatsapp: 0803 561 7233, 0703 414 5611
