Nigeria is set to rebase its GDP and CPI by 2025 to enhance economic metrics reflecting the informal sector. Historical context highlights the implications of previous rebasing efforts, which magnified GDP figures without fostering real growth. Current economic challenges, including soaring inflation and enterprise exits, raise concerns over the viability of this initiative without serious reforms in governance and economic policy.
The Nigerian government has announced plans to rebase its Consumer Price Index (CPI) and Gross Domestic Product (GDP) by 2025, aiming to integrate informal economic activities into official statistics. This strategy intends to improve policy accuracy and restore investor confidence as Nigeria strives for a $1 trillion GDP target. Historically, a similar rebasing in 2014 propelled Nigeria ahead of South Africa in economic size, nearly doubling its GDP.
Yet, projections indicate that unless significant reforms are enacted, Nigeria’s GDP could decline to the fourth largest in Africa by 2024. Stakeholders, including Richard Dowden of the Royal African Society, emphasize the necessity of organic economic growth rather than artificial inflation of GDP figures via adjusted methodologies.
Recent changes in the measurement of unemployment classified casual and self-employed workers, resulting in a misleading unemployment rate drop from 33.3% to approximately 5%. Despite this optimistic figure, actual unemployment levels could be as high as 50% in reality. Such inflation of economic metrics raises concerns, rendering GDP adjustments more a cosmetic exercise without substantive reforms.
The Nigerian Bureau of Statistics (NBS) adheres to global standards, including the United Nations’ classification for assessing economic activity, but saw GDP contraction by roughly 31% from 2014 to 2023. The impact of sustained inflation, currency devaluation—over 70% in one year—and rising hunger underscores the fragile state of the economy.
Furthermore, about 77 reputable brands have exited or scaled back their operations in Nigeria, attributing their departure to the unfavorable business environment marked by currency issues, high energy costs, and insecurity. These challenges contribute to slower output growth and diminish Nigeria’s competitive ranking in Africa.
The government’s ambitious rebasing initiative has garnered undeserved praise amid apparent mismanagement of economic responsibilities. With no comprehensive, accountable economic plan in place, Nigeria risks stagnation. Addressing fundamental issues such as security, economic stability, and infrastructure improvement is crucial. Learning from the principles of long-term solutions may be necessary for Nigeria to invigorate its economic prospects, as it appears ill-prepared for the implications entailed by inflated GDP figures.
The topic at hand delves into Nigeria’s ongoing economic strategies, particularly focusing on its intention to rebase GDP and CPI figures by 2025. The narrative is shaped by Nigeria’s previous success in rebasing which, while initially demonstrating economic growth, now faces scrutiny due to a lack of organic development and persistent economic challenges. The complexity of accurately measuring economic performance amidst informal sector dominance and significant reforms required to support sustainable growth and investor confidence forms the core of this discussion.
In summary, Nigeria’s forthcoming rebasing of GDP and CPI aims to reflect the extensive informal sector and bolster economic metrics. However, without meaningful reforms and a robust economic framework, such adjustments risk being purely superficial. Stakeholders emphasize that sustainable growth must be prioritized over merely altering statistical figures. Addressing fundamental economic and infrastructural challenges remains vital for genuinely advancing Nigeria’s economic standing and attracting vital investment.
Original Source: punchng.com
