Minister of Finance, Dr. Ngozi Okonjo-Iweala File Share


Plans to revalue Nigeria’s Gross Domestic Product will strategically position the country when compared with other leading economies on the continent, writes Okechukwu Nnodim



The revaluing of Nigeria’s Gross Domestic Product will have a positive impact on the economy if implemented in January 2012, as proposed by the National Bureau of Statistics, financial analysts have said.

GDP refers to the market value of all final goods and services produced within a country in a given period.

The nation’s Chief Statistician, Mr. Yemi Kale,was quoted by Reuters as saying that in January 2012, the country would change the base year for its GDP to 2008 from 1990.

According to him, the move can lead to a “huge jump” in the estimated size of the economy.

Reutersreports that most governments overhaul GDP calculations periodically to reflect changes in output and consumption, such as mobile phones and Internet usage, but adds that Nigeria has not done so since 1990.

According to the news agency, when Ghana rebased its vital statistics last November, output shot up by 60 per cent.

A similar increase for Nigeria’s $247bn economy would bring it to $395bn, much closer to the continent’s top economy, South Africa, which was currently at $422bn,the report said.

Describing the development as one that was capable of placing the country’s economy among the leading global economies, analysts told our correspondent on Saturday that the closer a nation’s base year was to reality, the better it would be as a parameter to check its economic progress.

The Chief Consultant, B. Adedipe Associates Limited, Dr. Biodun Adedipe, said the planned GDP rebase was necessary for consumer and producer price indices, stock index and all forms of indices.

Adedipe said, “Usually every index has a base year and the far away you are from the base year, the more distant from reality your current numbers.

“It is a statistical practice, and at some point it is necessary to change the base year and bring it closer so that the figures will be more realistic and therefore very reasonable when you compare them with others and this will adequately position the economy for the future.”

Adedipe stated that the change of the base year would not particularly be aimed at competing with other world economies, but to show the true position of Nigeria’s growth.

He said, “It is to reflect the actual value of what we produce, especially of our GDP. It is more of that and I don’t see it as targeted at any particular country whatever, and there is also the likelihood that some people will misinterpret it and say it is targeted at our vision 2020.

“The rebase of GDP is a statistical matter, and as I said, it is what you do with all kinds of indices. So, when you rebase, you can now take your readings from there.”

“It is certainly a positive initiative because for anybody familiar with statistical analysis, you will agree that 1990 is far when compared to where we are based on statistics that we have today. So, clearly, it is something that we need to address,” Adedipe added.

Another economist, Dr. Ayo Teriba, said that revaluing GDP was an academic exercise used to evaluate a nation’s economy across different periods.

He said,“It is simple and necessary, because the value of N1 this year is not the same as the value of N1 next year; so, GDP rebase or recalculation is analytical, for when you want to track things that are happening here, you use it to track them.

“The important thing is that since the economy itself changes with time, some people manage and fashion out policies that will accelerate growth, because the closer your base year is to reality, the better it is to check on your progress.”

“So, for the purpose of understanding what is happening, we are therefore adopting policies that will better prepare the economy for the future, but it does not affect what has happened in the past.”

Another analyst with Chatham House, Alex Vines, told Reuters that the GDP rebase would “help focus policy makers on Nigeria as an emerging economy that needs to be taken seriously.”

“Forecasters are talking about Nigeria by 2050 being a G20 economy. The commercial sector already understands that Nigeria could eclipse South Africa fairly quickly,” he added.

President Goodluck Jonathan, while speaking in Abuja last Thursday at an economic forum, had called on foreign investors to take advantage of investment opportunities in Nigeria. He described the country as fertile for businesses.

“Nigeria is like a green field in terms of investment , a global investment destination,” Jonathan said.

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