Nigeria is set to unveil a rebased Gross Domestic Product (GDP) for the first quarter of 2025, a revision that has not occurred since 2014. The update shifts the base year from 2010 to 2019, incorporating significant sectors like digital finance, e-commerce, and the creative industry, which have become vital to the economy. This rebasing aims to provide a more accurate reflection of Nigeria’s economic size and structure, potentially influencing key metrics like GDP size, per capita income, and debt-to-GDP ratio. However, questions remain about whether this statistical revision will translate into tangible benefits for the average Nigerian amidst high inflation, stagnant wages, and an underperforming economy.
The rebasing process is designed to capture structural changes and new economic activities. With the previous rebasing in 2014, Nigeria’s economy grew significantly, overtaking South Africa as the largest economy in Africa. This year’s revision is expected to reflect the growth of emerging industries and provide a clearer view of Nigeria’s evolving economic landscape. However, while the size of the economy may appear larger, it remains uncertain whether this will lead to improved living standards, as inflation and other economic pressures continue to undermine real income growth for many Nigerians.
A key implication of the rebasing is its potential impact on per capita income, which might show an increase on paper, even if individual earnings remain unchanged. While an uptick in GDP could improve Nigeria’s debt-to-GDP ratio, making debt levels appear more manageable, this would not necessarily translate into lower debt servicing costs or better public services. Additionally, the country’s low tax-to-GDP ratio suggests that without reforms to boost revenue collection, the benefits of a larger economy could be diluted, exacerbating fiscal challenges.
For the rebasing to have a meaningful impact, policymakers must focus on addressing underlying economic issues, including wage stagnation, unemployment, and inflation. Boosting job creation, improving wage levels, and investing in infrastructure and social services are crucial steps to ensure that GDP growth translates into higher real incomes. Without these measures, the rebased GDP may only serve as a statistical update, offering little relief to the average Nigerian struggling with the high cost of living and economic instability.
SOURCE: PUNCH