Explained: What GDP rebasing means, why it’s important for Nigeria

After more than ten years, the National Bureau of Statistics (NBS) has updated the way Nigeria calculates its Gross Domestic Product (GDP), now placing the country’s economic size at ₦372.82 trillion.

Known as GDP rebasing, this update offers a more accurate view of Nigeria’s present-day economy by including previously overlooked sectors.

The process, first announced in October 2024 and implemented in January 2025, modernises the way economic data is collected, ensuring that newer and rapidly growing industries are now reflected in national statistics.

Gross Domestic Product (GDP) measures the total value of goods and services produced within a country over a specific period and is a vital indicator of a nation’s economic performance. An increase in GDP shows growth, while a drop indicates economic slowdown.

GDP rebasing involves changing the base year used for measuring GDP to reflect more recent economic realities.

Nigeria last conducted this exercise in 2014 using 2010 as the base year.

Since then, the economy has experienced significant shifts, especially with the rise of digital technology, informal trade, and health insurance, among other sectors.

Countries are advised to rebase their GDP every five to ten years to ensure economic data remains relevant and accurate.

Without it, national figures can become outdated, misleading policymakers, investors, and development partners.

The 2025 rebasing exercise has now brought new sectors into the spotlight.

These include modular refineries, digital services, pension fund management, NSITF and NHIS contributions, expanded quarrying activities, informal businesses, and domestic households as employers. These additions played a major role in boosting the total GDP figure.

For businesses, this new GDP structure helps identify growing industries and encourages smarter investment decisions.

For government, it provides a better framework for planning, budgeting, and tax policy formulation.

Although GDP rebasing does not directly affect prices or reduce poverty, it offers a stronger foundation for development policies.

Importantly, it does not cause inflation or raise the cost of goods but improves how inflation trends are measured.

The NBS said the rebasing process was carried out transparently with collaboration from major institutions including the Central Bank of Nigeria (CBN), Nigerian National Petroleum Company (NNPC) Ltd, Federal Inland Revenue Service (FIRS), Nigerian Communications Commission (NCC), and the Securities and Exchange Commission (SEC).

This broader and updated view of Nigeria’s economy provides better tools for economic governance, strengthens investor confidence, and positions the country more competitively in the global market.