The rebasing of Nigeria’s GDP, which is expected to increase the estimated size of the nation’s economy by around 40 percent, is likely to be delayed until next year, director general of the National Bureau of Statistics (NBS), Yemi Kale, told Reuters on Monday.
The recalculation will enable Nigeria to join the ranks of middle-income countries and put it much closer in size to South Africa, the continent’s most developed economy. It will also make it an even bigger draw for foreign investors seeking a slice of Africa’s fast growth rates.
But several deadlines to implement the changes have been missed, with the latest being the fourth quarter of this year.
“It is unlikely that even the target of the last quarter (this year) we will make it”, Kale said at Reuters Africa Investment Summit.
“I underestimated how much work needs to be done … I think everyone understands that this is very, very crucial and has to be done properly”, Kale said when explaining the delay.
Most governments overhaul gross domestic product calculations about every five years to reflect changes in output and consumption, such as mobile phones and the Internet. Nigeria has not done so since 1990.
The rebasing is expected to add about 40 percent to Nigeria’s GDP, which would boost the economy of the nation from roughly $250 billion to around $350 billion.
That brings it very close to South Africa’s currently $385 billion economy. And, with a growth rate of over 6 percent a year, compared with 3 percent in South Africa, Nigeria may eventually overtake its rival to seize the top spot.
Some economists warn that a sharp increase in the size of Nigeria’s economy will mean slower growth.
“You’d expect that the bigger the economy, the slower the growth … but I don’t think it is as easy as that”, Kale said.
“Regardless of what our GDP is … we are still going to be small enough to produce even sharper growth rates”.
Sectors like telecommunications, construction, hotels and entertainment should get a greater weighting after rebasing but agriculture, which currently makes up around 40 percent of GDP and 60 percent of jobs, is likely to decrease in influence.
“Growth in agriculture is … largely subsistence, largely labour intensive, so there is a limit to how much you can grow. We know that capital intensive technology probably generates more output than labour intensive technology”, Kale said.
He said the oil and gas sector, which contributes around 80 percent of government revenues, is expected to maintain a similar weighting of around 15 percent.