A New GDP: What Nigeria must not miss

By : Ayo Olododo

NBS

National Bureau of Statistics (NBS)

In a few days, the National Bureau of Statistics (NBS) will release the rebased GDP, the first update in over a decade. It is correct to predict that the new GDP will be big, taking a cue from previous rebased figures when Nigeria overtook South Africa in 2014.

But before we pop the champagne, let’s ask: what does this really mean?

Rebasing a country’s GDP is like cleaning the lens of a camera. It helps us see the economy more clearly, using updated data that reflects how people actually earn and spend money today, not how they did 10 or 15 years ago.

Our last update was based on 2010 figures. Since then, Nigeria has changed a lot. We now have food delivery apps, online payment platforms like Opay, content creators, Netflix, digital marketers, and a much larger informal sector. These are the kinds of changes this new GDP is expected to capture.

It will likely show that Nigeria’s economy is bigger than we thought, maybe much bigger. That may sound like good news, and in some ways, it is. A bigger GDP can help improve our credit ratings and investor confidence. It can also highlight sectors that are growing fast and deserve more attention.

But let’s be honest, this won’t magically fix the problems we live with every day. It won’t reduce the cost of food. It won’t solve insecurity. It’s simply a statistical update. And that’s why it needs to be understood by everyone. We must not mistake a bigger number for better living conditions.

In 2014, after the last rebasing, Nigeria became the largest economy in Africa. But for many Nigerians, it looked like nothing changed. The roads were still bad. Power supply was still erratic. Salaries didn’t rise. Prices didn’t fall.

This time, we might do better. The new GDP figures might be used as a tool to energise the present direction of the Nigerian economy. The new figures should help the government see where we’re making progress and where we’re falling behind. If digital services and entertainment are booming while agriculture and manufacturing are shrinking, for example, then our policies must respond accordingly. If the informal sector is larger than we thought, we need to find ways to support and integrate it into the formal economy.

Because numbers alone won’t build roads or power plants. In this case, they must be supported by real reforms.

Another concern is the temptation to lay emphasis on the debt-to-GDP ratio. A bigger GDP makes our debt-to-GDP ratio look smaller, which might technically make it easier for the government to borrow. But unless we improve revenue collection and spending discipline, more debt, if not carefully assessed, could make things worse, not better.

And then there’s the challenge of communication. “GDP rebasing” is technical, abstract, maybe even suspicious. Yet this is an opportunity for analysts to rely on NBS official releases and not those cooked by the side or manipulated by those who want to play to the gallery. People must understand how this affects jobs, businesses, inflation, and national planning from well-informed economists and analysts.

At the heart of it, this rebasing is a reality check. It tells us the true shape of our economy. It gives us a more accurate map. But it’s up to all of us — government and citizens — to decide what to do with it.

If we use this updated data to plan better, invest smarter, and govern more responsibly, then this exercise will be worth far more than any jump in GDP. But if we treat it as another moment of self-congratulation, we will miss the point entirely.

Let’s not waste the clarity this new data may give us. We’ve seen where we are; now let’s get to where we should be.

Olododo is an economist and unlicensed commentator based in Abuja

GUARDIAN Newspapers.