The National Bureau of Statistics (NBS) has commenced activities to rebase the country’s Consumer Price Index (CPI) and Gross Domestic Product (GDP) to reflect more updated economic conditions.
The exercise, according to the NBS, is in line with the recommendations of the United Nations Statistical Commission, which states that countries should rebase their GDP every five years to reflect more updated economic conditions.
However, in Nigeria, the last rebasing exercise was done in 2014 and the current exercise will be the second in almost a decade.
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Speaking during the stakeholders sensitisation workshop in Abuja, Adeyemi Adeniran, the Statistician General of the Federation stated that given the informal nature and structure of the Nigerian economy, the exercises have become much more important in statistical production.
He said, “It is for this reason therefore, that when the decision was made to embark on the rebasing exercise, we made it a cardinal objective to ensure inclusivity, collaboration, and partnership throughout the process of these rebasing exercises.
“Our experience in recent times has shown that we have no other option than to continue to engage and foster partnerships with all constituents of the statistical system for better results.
“In an era of rapid change and global interconnectedness, the need for accurate and timely data has never been greater, and this is why we are engaging with stakeholders like you today, and we are committed to having more of these engagements with other relevant stakeholders.”
In his remarks, Ode Ojowu, former member of the Economic Advisory Council stated that since the last rebasing in 2014, Nigeria has witnessed a structural shift in the field of technology and digital sectors, encompassing the rise and adoption of fintech, e-commerce, and digital service.
According to him, the current exercise to rebase the GDP will alter the values of the current macroeconomic indicators which are used by the government to inform policymaking.
“For example, in 2013, some financial indicators were lower than in the pre-rebased period, with the private sector credit to GDP dropping from 37.2 (before rebasing) to 19.7 percent (after rebasing) in 2013 and expanding to 27.2 percent in 2023.
“Broad money supply declined from 35.8 (before rebasing) to 18.9 percent of GDP (after rebasing) in 2013 and rose to 34.3 percent of GDP in 2023. From the policy perspective, these “overnight” drops looked like a lower private sector credit expansion and constrained financial system development.
“Similarly, the 2014 rebased GDP lowered the fiscal deficit as a ratio of GDP by half from 2.1 to 1.1, but within a decade the government has rapidly expanded the fiscal deficit to the current level of 5.6 percent of GDP.”
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He said that with the anticipated rise in the size of the GDP when the current rebasing exercise is concluded, it will reduce the nation’s fiscal deficit to GDP ratio.
Noting that in 2014 the rebased GDP pushed the debt stock-to-GDP ratio down from 23.7 to 12.5 percent in 2013, Ojowu said that within the decade, the government has again ramped up the ratio to 42.3 percent.
He explained that with the anticipated rebasing of the GDP, Nigeria’s tax-to-GDP ratio could drop significantly. “Will the government be tempted to then raise taxes to ramp up the tax revenue as a percent of the GDP?
“The piece of advice here is that while we may jubilate over the size of the GDP that could reconfirm our position as the biggest economy on the continent of Africa, we will do well to continue to critically examine the composition of the GDP, its ability to create employment, enhance incomes and generate revenue, sector-by-sector.
“The NBS has continued to fulfill its mandate of publishing reliable and timely social and economic statistics, but data on Nigeria’s population are outdated.
“The population census was last conducted in 2006, and since then, all population data are based on projections. The non-conduct of the census at regular intervals by the National Population Commission has made population data unreliable and by that score has reduced the value of the NBS data when combined with the projected population data in policy making. Therefore, I call on the federal government to show commitment towards the conduct of the population census.”
