Recently, the National Bureau of Statistics (NBS) released the rebased GDP figure, showing the GDP grew by 3.13 percent in the first quarter of 2025 from the 2.27 percent recorded in the same period in 2024. Amidst the misconception on the number, the NBS in this interview through Mr. Moses Waniko, an expert in national accounting and technical assistant to the statistician general, Prince Semiu Adeyemi Adeniran, provides a deeper insight on what the rebased GDP figure means. Excerpt!
To start with, can you give an insight into what GDP and GDP growth, and why are these statistics important?
The Gross Domestic Product (GDP) is the market value of all goods and services produced within a country in each period. GDP measures the overall economic activities and signals the direction of economic growth. It is also a barometer to measure the health of the economy. It is an internationally recognized indicator for measuring the size of an economy in each period of time. The GDP growth rate is a measure of the rate of change that a nation's gross domestic product (GDP) experiences from one period to another either annually or quarterly.
Is GDP growth synonymous with economic development?
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No, GDP growth is not synonymous with economic development. Development encompasses broader measures of human progress beyond measuring output (GDP) growth, which mostly measures economic progress. In addition to measures of economic progress, development includes social and environmental measures that are not well captured by GDP.
And there are three approaches to computing GDP, which are the expenditure approach, income approach and the value added approach.
The Expenditure Approach captures spending by key economic agents in an economy. It is the sum of consumption expenditures by households, investments expenditures by firms, government expenditures, as well as the difference between exports and imports:
The Income Approach measures the income earned by various factors of production. It is a sum of: compensation to workers, rental income, taxes on production and imports (less subsidies), interest, miscellaneous payments, and depreciation while the last approach which is the Production or Value-Added Approach represents Gross output (GO) less the purchase of intermediate inputs used to produce the final products.
There has been some controversy and misunderstanding around GDP rebasing, can you share with us what it is about?
Rebasing or re-benchmarking of the national account series (GDP) is the process of replacing an old base year used to compile volume measures of GDP with a new and more recent base year or price structure. Economies are dynamic in nature. They grow, they shrink, they add new sectors, new products and new technologies, and consumer behaviour and tastes change over time.
Rebasing / Re-benchmarking is used to account for these changes, so as to give a more current snapshot of the economy, as well as improve the coverage of economic activities included in the GDP compilation framework. The base year provides the reference point to which future values of the GDP are compared. It is a normal statistical procedure undertaken by the national statistical offices of countries to ensure that national accounts statistics present the most accurate reflection of the economy as possible.
What are the benefits of rebasing/re- benchmarking
The key benefit of the rebasing exercise is that its results enable policy makers and analysts obtain a more accurate set of economic statistics that is a truer reflection of current realities for evidence-based decision-making. It also reveals a more accurate estimate of the size and structure of the economy by incorporating new economic activities that were not previously captured in the computational framework.
Rebasing will enable government to have a better understanding of the structure of the economy, an indication of sectoral growth drivers, sectors where policies and resources should be channeled in order to grow the economy, create jobs, improve infrastructure and reduce poverty.
How often should a country rebase?
The UN Statistical Commission (UNSC) recommends that countries rebase every five years. However, some countries do it at intervals of less than five years.
But we have seen Nigeria rebasing the GDP at an interval more than recommended by the UNSC, what really went wrong?
Nothing, GDP rebasing is a resource intensive project. It requires major surveys that are highly capital intensive such as the Nigeria Living Standard Survey (NLSS), Agricultural Census and census/survey of Establishments. The output of these surveys serves as input into the rebasing process. Sourcing the funds to conduct all of these surveys is always difficult hence the lag in rebasing interval.
What methodology was adopted for this rebasing exercise?
The exercise was conducted in line with internationally-recognized methodology procedures and guides. The National Bureau of Statistics (NBS) started with an update of its survey frame, complemented by a listing exercise.
With the new number, does it mean Nigeria is now a richer country?
No, rebasing will not change the facts of our economy overnight. It will not make poverty and unemployment disappear overnight, but it will give us the tools and the policy ability to tackle these problems in order to reduce poverty and improve the welfare of our people. The rebased GDP numbers imply that the level of economic activity is much higher than previously reported. It indicates a clearer picture of Nigeria's economic landscape and the significant opportunity for growth and wealth creation in the Nigerian economy.
We have seen poverty and unemployment on the increase despite rebasing the economy?
The rebasing exercise has revealed that the key determinant of the expanding output/GDP growth has been the dominance of capital-intensive rather than labour-intensive activities. This suggests that increasing adoption of technology is leading to an expansion of output without the need to employ more labour. Rebasing does not change the challenges of poverty or unemployment but rather measures the economy more accurately so that policy can be designed to address them.
Rebasing the GDP does not correct for inequality (where the benefits of a higher GDP may be concentrated in a few hands) or solve poverty problems; rather it brings the comparison of GDP estimates to the closest picture of reality as possible. Having a better (and more accurate) picture of the economy is crucial to informing policy makers, investors, and even consumers on the current economic trends, which will help them make better informed decisions regarding their economic choices. For example, policy makers may identify inequality as a factor inhibiting a more inclusive distribution of output / GDP growth and consequently design policies and programmes to address that inequality so that output / GDP growth is shared more equitably. It is in this way, the "common man" will feel the benefits of GDP rebasing exercise.
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Does it mean that Nigeria's GDP for the last ten years has been inaccurate?
The rebased numbers are a better reflection of the true size and structure of the economy. It does not mean the old series are wrong; it means we are capturing more activities and measuring better.
What is the implication of the rebased GDP estimates on the real and nominal GDP?
Nominal GDP measures the level of economic activity using the current year's price level and quantities to obtain the total value of goods and services. Real GDP measures the level of economic activity by making reference to a pre-selected base year, for the purpose of "cancelling out" price effects in the computation of the value of goods and services (to obtain the "real" value). Thus, at the base year, the nominal and real values of the GDP estimates are equal.
