Nigeria Embarks on Major GDP and CPI Rebasing Exercise

The National Bureau of Statistics (NBS) has announced the commencement of a comprehensive rebasing of Nigeria’s Gross Domestic Product (GDP) and Consumer Prices Index (CPI).

This move, detailed by Statistician-General of the Federation and NBS Chief Executive, Prince Semiu Adeniran, aligns with the United Nations Statistical Commission’s recommendation for a five-year rebasing cycle. The last exercise was conducted in 2014, making this the first in nearly a decade.

Speaking at the opening of a sensitisation workshop for stakeholders in Abuja on Thursday, Adeniran underscored the importance of accurate and timely data in today’s interconnected world. The workshop aims to engage critical stakeholders, solicit feedback, and ensure that the updated estimates meet user needs, providing a more precise economic picture.

“While these exercises are routine statistical practices,” Adeniran stated, “delays and irregularities in major statistical activities have heightened their significance. The informal nature and structure of our economy further complicate data collection, making this exercise crucial.”

The rebasing is expected to capture significant structural changes in Nigeria’s economy since 2014. Former Chief Executive of National Planning, Ode Ojowu, highlighted the rapid growth of sectors such as technology, fintech, e-commerce, agribusiness, renewable energy, and the entertainment industry.

“The rebasing of the CPI and GDP will reflect these sectoral shifts,” Ojowu noted. He commended the NBS for its efforts to provide reliable data to support both government and private sector decision-making but acknowledged that the rebasing would alter current macroeconomic indicators.

“In 2013, financial indicators changed dramatically post-rebasing,” Ojowu recalled. “Private sector credit to GDP dropped from 37.2% to 19.7%, broad money supply declined from 35.8% to 18.9% of GDP, and the fiscal deficit ratio halved from 2.1% to 1.1%. Today, we face similar anticipations with the upcoming rebasing.”

Ojowu expressed concerns about potential government responses to the rebased GDP figures. “Will a lower fiscal deficit-to-GDP ratio encourage increased expenditure? Could a lower debt-to-GDP ratio tempt the government to expand its debt closer to international thresholds? These are critical considerations for maintaining fiscal stability.”

He also addressed the implications for tax revenues. “In 2014, the rebased GDP reduced the federal tax revenue to GDP from 11.3% to 6%. Despite improvements, it remains among the lowest globally. The anticipated rebasing could further lower this ratio, prompting potential tax increases.”

Ojowu advised a cautious approach: “While we might celebrate an increase in GDP size, reaffirming our position as Africa’s largest economy, we must critically examine GDP composition, its employment creation capacity, income enhancement, and sector-specific revenue generation.”

The rebasing exercise promises to provide a clearer, more current picture of Nigeria’s economic landscape, crucial for informed policy-making and strategic economic planning.