Nigeria’s National Bureau of Statistics will release rebased GDP figures in 2025, shifting the base year to 2019. This may result in higher GDP and per capita income figures, but questions persist regarding the actual economic benefits for citizens amid inflation and stagnant wages. Policymakers need to address underlying issues to ensure that GDP growth reflects real prosperity.
The National Bureau of Statistics of Nigeria is set to release the rebased Gross Domestic Product (GDP) figures for the first quarter of 2025, marking the first update in over a decade. This recalibration will change the reference year from 2010 to 2019, hence providing a more accurate reflection of the economy’s size and structure. The rebasing will include the fast-growing sectors such as information technology, e-commerce, and the creative industries, allowing for better representation of informal economic activities.
Rebasing of GDP is essential for capturing and reflecting current economic realities, yet questions remain regarding its impact on per capita income, which is an important measure of economic wellbeing. The concern is whether the new GDP figures will signify better living standards or merely inflated statistics devoid of real benefit. Nigeria currently faces high inflation, fluctuating exchange rates, and stagnant wages, leading many to doubt the tangible benefits of the rebased GDP for average citizens.
This process involves updating the reference year used to calculate GDP, ensuring it mirrors contemporary consumption patterns and industry contributions. Previous rebasing efforts revealed considerable growth in sectors such as telecoms and finance. The anticipated rebasing is expected to reassess the economy’s structure, thus potentially leading to inflated GDP figures while needing to reflect the practicality of growth through improved living conditions.
Data from the International Monetary Fund indicates a significant decline in Nigeria’s GDP per capita from $3,022 in 2014 to $835.49 in 2024, illustrating a contraction in economic output per person due to depreciating currency. While rebasing may provide better estimates for per capita GDP, it remains to be seen whether this statistical growth will translate into real-world gains for individuals as inflation and economic stagnation persist.
If rebasing leads to an increase in GDP, key macroeconomic indicators will also be positively influenced. A larger GDP may improve Nigeria’s debt-to-GDP ratio, which is crucial for evaluating debt sustainability. However, despite this apparent improvement, the high cost of debt servicing continues to burden the government’s financial capability.
The tax-to-GDP ratio in Nigeria is low at around 10%, and any enlargement of GDP without improving tax collection could further diminish fiscal health. Policymakers must reform taxation to enhance revenue mobilization in line with the rebased GDP figures. Insights from workshops reveal that rebasing will not only provide economic clarity but will also inform development planning and fiscal strategies for greater economic stability.
Challenges surrounding the accurate assessment of real income growth abound. High income inequality means that even if GDP increases, many citizens face stagnant wages and limited opportunities. The informal sector’s expansion complicates translating GDP growth into significant income gains.
Additionally, high inflation and currency volatility pose ongoing challenges. Even projected increases in per capita income may lose value against rising living costs unless adequately addressed by comprehensive economic reforms. Addressing income growth requires targeted actions from policymakers to bolster wage levels, enhance employment opportunities, and strengthen social safety nets.
Furthermore, investing in essential sectors such as infrastructure, education, and healthcare will be vital in distributing the benefits of economic growth broadly. Effective governmental policies must align with the lived experiences of the populace to ensure GDP growth is reflected in tangible improvements in quality of life.
The rebasing of Nigeria’s GDP represents a crucial opportunity to reflect the economy’s current realities, yet it raises critical questions about its impact on the livelihoods of ordinary Nigerians. While new figures may depict a robust economic environment, actual improvements in living standards depend on comprehensive policies aimed at wage improvement, job creation, and poverty reduction. A successful rebasing should result in meaningful economic enhancements rather than mere statistical inflation.
Original Source: punchng.com
