The Nigerian government has announced plans to rebase the country’s Consumer Price Index (CPI) and Gross Domestic Product (GDP) by 2025, a move aimed at improving the accuracy of economic data and boosting investor confidence.
The Ministry of Finance revealed this initiative following a meeting between Adeyemi Adeniran, Statistician General of the Federation, and Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.
The rebasing initiative is expected to be validated and launched in early 2025. According to the Ministry, the updated frameworks will enhance Nigeria’s economic management and align its indicators with global standards.
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In a statement shared on X (formerly Twitter), the Ministry highlighted the potential of the rebasing effort to bring significant economic benefits. These include improved policy accuracy through the use of more precise fiscal and monetary data, increased investor confidence with a clearer and more reliable depiction of the economy, and enhanced global comparability by aligning Nigeria’s economic indicators with international benchmarks.
This rebasing exercise addresses long-standing concerns regarding Nigeria’s economic data, particularly its failure to capture the vast informal sector adequately. Estimates suggest that the informal sector accounts for approximately 60% of the country’s economic activities, yet it remains significantly underrepresented in current GDP figures. The government aims to present a fuller and more accurate picture of the economy by adopting a more comprehensive methodology. This, in turn, is expected to inform more effective policymaking and attract increased investment.
Rebasing involves updating the methodologies and base year used to calculate economic indicators such as GDP and inflation. This process is particularly crucial for Nigeria, where outdated frameworks have distorted the understanding of economic realities, making it challenging to address issues such as inflation, unemployment, and growth.
The current methodology, for instance, is said to have contributed to a significant decline in Nigeria’s GDP in dollar terms, causing the country to drop from its position as Africa’s largest economy to fourth place.
In 2023, the Nigerian Bureau of Statistics (NBS) undertook a similar adjustment when it updated its unemployment data methodology to include casual and self-employed workers. This revision led to a sharp decline in the official unemployment rate, from 33.3% to 5%. While the adjustment was criticized for failing to capture the true scale of unemployment, the NBS defended its position, citing alignment with global best practices.
The forthcoming rebasing of the CPI and GDP may encounter similar scrutiny, but its potential to provide a more holistic view of the economy is likely to outweigh initial skepticism.
The rebasing exercise also brings into focus several pressing issues for Nigeria. The country’s GDP valuation in dollar terms has been severely impacted by the depreciation of the naira, underscoring the urgent need for robust economic policies to stabilize the currency. Additionally, the updated data is expected to reveal deeper structural challenges, including the government’s over-reliance on oil revenues and its limited success in tapping into the informal sector.
The rebased data is believed to have the potential to guide better economic policies and restore investor confidence, positioning Nigeria to reclaim its status as Africa’s leading economy. However, many have expressed concern that it may be a ploy by the government to distort the country’s economic realities to suit its narrative.