Nigeria GDP projected to increase as govt plans to rebase economy

Nigeria’s Gross Domestic Product (GDP) is projected to rise amid plans by the Nigerian government to rebase the economy to 2018/19.

Sunday Ichedi, spokesperson of the National Bureau of Statistics, on Wednesday made the plan to rebase the economy known, in a statement announcing the bureau’s commencement of the National Business Sample Survey.

Mr Ichedi told PREMIUM TIMES by phone afterwards that

the new plan would see the statistics bureau move to 2018/19 in its adopted price benchmark for calculating the GDP, which could in effect increase the size of the Nigerian economy and its real GDP.

The Gross Domestic Product (GDP) is the total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment, government spending plans and the value of exports less the value of imports.

GDP rebasing is the process of replacing old base year price structure in compiling volume measures of GDP with a new or more recent base year, usually at five years average interval.

Mr Ichechi said the new business survey would provide sectoral data at national and state levels and determine the structure of the Nigerian economy. It will also help policy makers determine the sectors that drive the economy and those that require government intervention to improve them, he explained.

“The survey which is done in collaboration with the World Bank would cover the 36 states of the Federation, including the Federal Capital Territory,” he said.

The World Bank puts the value of the Nigerian economy, the biggest in Africa, as of 2019 at $448.12 billion, up from $397.19 billion in 2018.

“Recession”

Nigeria tried to rebase its economy both in 2012 and 2013, but the government postponed the moves following the disruption caused by subsidy protests and other socio-economic uncertainties.

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But in 2014, the nation finally rebased its GDP and the figures soared by 89.22 per cent, amid criticisms from labour unions and opposition parties. The move pushed Nigeria’s GDP to N80.2 trillion, or $509.9 billion, rising from its original figure of N42.4 trillion, or $269.5 billion.

Although it could be deployed for political reasons, experts say that GDP rebasing makes planning and investment decisions more robust and informed, as it reflects the performance of the government in revenue collection, capital spending, and external debt.

It can also strengthen the basis for budgeting and other fiscal interventions, which can then be benchmarked against similar economies of the world.

Last August, the NBS said Nigeria’s Gross Domestic Product (GDP) decreased by –6.10 per cent in real terms in the second quarter of 2020, ending the 3-year trend of low but positive real growth rates recorded since the 2016/17 recession period.

The decline was largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.