By Patrick Wemambu
Last week, the Nigerian Bureau of Statistics (NBS) said the nation’s Gross Domestic Product (GDP) stood at N372.8 trillion ($243 billion) in 2024, after the base year for calculating the figure was shifted to 2019.
“In nominal terms, the rebased GDP for 2019 stood at N205.09 trillion, N213.63 trillion in 2020, N243.30 trillion in 2021, N274.23 trillion in 2022, N314.02 trillion in 2023, and N372.82 trillion in 2024.
“This revision represents a 41.7% increase in nominal estimates compared to a 59.7% revision in the 2010 rebasing exercise,” the NBS revealed in a report titled, ‘Rebasing of Gross Domestic Product (GDP).’
According to the NBS report, the rebased nominal GDP at basic prices in 2019 reflected a 41.7% increase over the 2019 nominal GDP calculated using the old 2010 base year. This upward revision continued in subsequent years, with the rebased figures showing increases of 39.0% in 2020, 38.7% in 2021, 36.1% in 2022, 34.6% in 2023, and 35.4% in 2024.
Noting that the real GDP growth post-rebasing period is estimated at -6.96% in 2020 during the Covid pandemic, the report indicates the figure jumped to 0.95% in 2021, 4.32% in 2022, 3.04% in 2023 and 3.38% in 2024.
Dissecting the statistics sectorally, we are informed agriculture led in growth, recording its highest rate of 2.66% in 2020. In contrast, however, both the industrial and services sectors experienced contractions that year. Whereas the former shrunk by 22.72%, the latter deflated by 5.37%.
Conversely enough, the services sector had rebounded by 2024 with the highest growth rate of 4.43% – followed by the industrial sector at 2.80%, while the agricultural sector recorded a more modest increase of 1.69%. Real estate remained the third-largest contributor to the economy.
“Analysing the 2010 base year nominal figures in 2019, agriculture accounted for 22.12% of the GDP, while industry contributed 27.65% and services 50.22%. According to the rebased 2019 figures, the share of agriculture has risen to 25.83%, industry declined to 21.08%, while services increased to 53.09%,” NBS stated.
This brings us to the imperatives of utilizing the study of political economy in understanding the rebasing exercise. Simple, although the interplay between the discipline and gross domestic product (GDP) which is a cornerstone is a multifaceted relationship – studies about the former shows how it influences the economic system and vice versa. This relationship is crucial for providing insights into the overall health and trajectory of an economy.
Notwithstanding impact of the rebasing, criticisms by political economists have trailed the exercise. Is it not mind-boggling that there is disconnect between the GDP growth and tangible benefits for the masses? They inquire. Invariably, these have sparked intense debates about the nation’s economic prospects.
For starters, grave concerns exist over apparent inability of the new GDP figures reflecting real improvements in living standards. It has been alleged that the initiative was politically motivated. While the rebasing aims to provide a more accurate picture of the economy by incorporating new sectors and a more recent base year, critics argue that it may not translate to tangible benefits for ordinary citizens.
Statistics reveal over 82.9 million Nigerians are considered poor by national standards. Highest deprivations are in the indicator of child engagements, where over half of poor children lack the intellectual stimulation necessary for early childhood development.
An example ought to suffice here. World Bank report ‘A Better Future for All Nigerians: Nigeria Poverty Assessment 2022’ highlights that sluggish growth, low human capital, labour market weaknesses, and exposure to shocks are holding Nigeria’s poverty reduction back.
Again, pundits view the rebasing as a superficial exercise that doesn’t address deeper structural issues within the Nigerian economy. The timing of the rebasing – coming when 2027 politicking have relegated governance to the background have fuelled speculations about its political motivations.
Similarly, the rebasing process including some ‘jobs’ considered unethical has questioned the role of the NBS in legitimizing such activities.
Moreover, despite the overhaul, Nigeria remains fourth largest economy in Africa, the failure of the ‘seventh most populous black nation globally’ to reclaim its erstwhile status as the largest economy in Africa has left tongues wagging.
According to the International Monetary Fund (IMF), South Africa remains the continent’s biggest economy with a GDP of $410.34 billion for a country with little over a quarter of Nigeria’s population. Egypt is next with a GDP of $347 billion while Algeria maintains its third position having $268.9 billion as the size of its economy.
Concluding, some political economists have suggested Nigeria adopts a more frequent rebasing cycle, similar to South Africa, to ensure that the GDP figures accurately reflect the evolving economic landscape. Just as this should allow for more timely adjustments to economic initiatives – it is crucial for it to be accompanied by targeted policies to address perennial challenges like unemployment, poverty and inflation.
