The ongoing rebasing of key macroeconomic variables—Gross Domestic Product (GDP) and inflation—marks a pivotal moment in Nigeria’s quest to better understand and manage its economy. As the rebasing exercise unfolds, it provides an opportunity to align statistical measurements with current economic realities, ensuring that policy decisions are rooted in accurate and representative data.
Context on Rebasing Real Sector Macroeconomic Indicators
In recent years, several sub-Saharan African (SSA) countries have undertaken comprehensive revisions of their gross domestic product (GDP) and broader national accounting frameworks. These rebasing exercises aim to update the base year used for GDP calculations, ensuring that national statistics reflect the evolving economic structures and realities. Ghana pioneered the modern GDP rebasing trend in the region in 2010, resulting in a near-doubling of its GDP, which propelled the country into middle-income status. Following suit, Kenya rebased its GDP in 2013, leading to a 25% increase in its economic size. Tanzania, Zambia, and Uganda also conducted similar exercises, recording GDP size increases of 27.8%, 25.2%, and 13.1%, respectively.
Nigeria’s rebasing in 2014 was particularly significant, as it updated its base year to 2010 from 1990 to account for emerging sectors that had previously been excluded, such as telecommunications, entertainment, and technology, making the service sector account for about half of the Nigerian economy. This exercise almost doubled Nigeria’s GDP, positioning it as Africa’s largest economy, surpassing South Africa. While these exercises have offered an improved representation of the size and composition of the economy, it is crucial to note that they do not equate to immediate improvements in citizens’ welfare. Rather, they reflect structural transformations within the economy over time, necessitating an updated statistical framework to capture these changes.
Why then does rebasing matter?
Rebasing GDP involves updating the base year used to calculate the value of economic activities, reflecting changes in the structure of the economy over time. Similarly, revising inflation measures accounts for shifts in consumption patterns and the evolving dynamics of the marketplace. These exercises are not mere statistical adjustments; they are critical tools for reshaping how we view economic performance and formulate policies.
- GDP Rebasing:
- Nigeria last rebased its GDP in 2014, moving the base year from 1990 to 2010. This process revealed a much larger and more diversified economy than previously reported, catapulting Nigeria to the position of Africa’s largest economy at the time.
- The current rebasing exercise is expected to incorporate sectors that have emerged or expanded significantly in recent years, such as technology, digital services, and the informal economy. This will provide a clearer picture of the economy’s true size and composition, enhancing the credibility of Nigeria’s economic data globally.

- Inflation Rebasing:
- The ongoing review of the Consumer Price Index (CPI) aims to update the basket of goods and services used to measure inflation. With consumption patterns having evolved significantly, the current basket may no longer accurately capture price movements affecting households.
- A redefined CPI could reveal a more nuanced understanding of inflationary pressures, helping policymakers target interventions more effectively, especially in combating food and energy price volatility.
- This rebasing involves several structural changes to the CPI’s methodology, including an expansion of the basket of goods and services and the introduction of a new division.
- Key Structural Changes in Nigeria’s CPI Methodology

- The increase from 740 to 960 items in the CPI basket accounts for the diversification in consumer behavior and the introduction of new products and services in the market. The addition of the “Insurance and Financial Services” division acknowledges the growing importance of these services in the average consumer’s expenditure.
Implications of the Rebasing Exercises
Rebasing Nigeria’s GDP and CPI is more than a statistical formality; it has significant implications for economic policy, investment decisions, and international perceptions. An updated GDP provides a clearer picture of the economy’s size and structure, influencing fiscal policy, debt management, and development planning. Similarly, an accurate CPI is crucial for assessing inflation, determining interest rates, and protecting consumer purchasing power.
By embracing these rebasing exercises, Nigeria demonstrates a commitment to transparency and data-driven decision-making, laying a more solid foundation for sustainable economic growth and development.
- Improved Accuracy for Planning and Investment:
Accurate GDP and inflation data enable better fiscal and monetary planning. With updated metrics, the government can assess its economic objectives, such as revenue-to-GDP ratios or debt sustainability, more reliably. Investors, both domestic and international, rely on these figures to make informed decisions. - Enhanced Policy Targeting:
Rebasing provides a more accurate reflection of economic activity and cost-of-living adjustments, allowing for better-targeted interventions. For instance:- Fiscal policies, such as subsidies or tax reforms, can be aligned with the needs of key sectors.
- The Central Bank of Nigeria (CBN) can recalibrate its inflation-targeting framework based on updated price indices, improving the effectiveness of monetary policy.
- Broader Global Perception:
An updated GDP base year enhances Nigeria’s global economic standing, attracting foreign investment and facilitating engagement with international financial institutions. Accurate inflation data reassures markets of the government’s commitment to transparent economic governance.
Challenges and Risks
Rebasing exercises are not without their challenges. The process requires extensive data collection and collaboration with stakeholders, which can be time-consuming and resource-intensive. Moreover, updated metrics may reveal uncomfortable truths, such as a slower-than-expected economic recovery or underestimated inflationary pressures, potentially unsettling markets or sparking public criticism.
Looking Ahead
The ongoing rebasing of GDP and inflation represents a crucial step toward improving Nigeria’s statistical infrastructure and aligning economic data with the realities of the 21st century. As the outcomes unfold, it is essential for policymakers, businesses, and the public to engage constructively with the results, leveraging them to build a more resilient and inclusive economy.
Nigeria’s ability to manage this transition effectively will signal its readiness to navigate the complexities of a changing economic landscape, laying the groundwork for a future defined by evidence-based policymaking and sustained growth.