LAGOS (Reuters) - The size of Nigeria's economy will shoot up by some 40 percent in the second quarter this year, placing Africa's second-biggest economy on the list of middle income countries and bringing it closer to rival South Africa, a source close to the matter said.

The makeover may give the country financial bragging rights, but will change little for the millions trapped in poverty.

From around July or August this year, Nigeria will change the base year for its GDP calculation to 2009, from its current 1990, the source told Reuters on Wednesday, applying the new base from Q2 onwards.

Analysts said a recalculation along those lines would bring Nigeria's economy up from a current IMF estimate of $270 billion for 2012 to about $375 billion - just behind South Africa's, expected to be around $390 billion by the end of 2012.

The source said the calculations had "taken into consideration fluctuations, availability and consistency in the data in choosing the new base year, which will be 2009," and that it will be applied from the second quarter of 2012.

Most governments overhaul gross domestic product calculations every few years to reflect changes in output and consumption, such as mobile phones and the Internet. Since Nigeria has not done so since 1990, analysts had expected a large jump. Nobody had put a number on it until now.

Nigeria's markets were largely unmoved on Wednesday, with the stock exchange index trading marginally up 0.34 percent. The move was flagged late last year.

With growth 7 percent a year, compared with 3 percent in South Africa, Nigeria looks set to overtake its rival to seize the top spot, an event that would most likely boost interest in local consumer goods companies seeking to unlock the potential of Africa's most populous country and its 160 million consumers.

"Perhaps the upside for Nigeria is that it will become too important to ignore as a frontier market and investment destination," said Standard Bank's Samir Gadio, but he added that the change was largely "a symbolic turnaround" that will have little impact on Nigeria's actual diplomatic clout.

"UNDERDEVELOPED"

Nigeria's GDP may be roaring ahead, but a glance look at its huge and fast growing population and poor record on governance makes them look less impressive, analysts said.

Poverty in Africa's top oil producer is rising. A decade of breakneck economic growth has failed to lift 100 million people living on less than $1 a day out of dire poverty.

The percentage of Nigerians living in absolute poverty - those who can afford only the bare essentials of food, shelter and clothing - has risen to around 60 percent, thanks largely to kleptocratic governance hampering basic services.

"Nigeria remains significantly underdeveloped in terms of basic infrastructure (electricity, roads, etc) and faces high income inequality. Output per capita in Nigeria will continue to trail that of South Africa over the next decades," said Gadio.

The rebasing will also improve Nigeria's debt to GDP ratio, currently at around 16 percent. But Alan Cameron, an economist at Nigerian stock broker CSL questioned whether that would make a difference to its debt position - especially with its poor record on saving money despite high world oil prices.

"While certain debt ratios will be flattered by the revision, to us the question of debt sustainability has always been about the government's servicing capacity rather than the ratio of debt to GDP," he said.

Nigeria's tax revenues, seen as woeful for a country of this size, will look even smaller. Nigeria does not publish tax revenue figures but they are suspected to be extremely low, with 95 percent of government revenues coming from oil output.

Even as a consumer market, South Africa with its rising middle class and good infrastructure is likely to dwarf Nigeria for some time to come.

"Look at any metric estimating the size of the consumer market in South Africa...and look for the comparable figure in Nigeria...and the difference is far greater than 10 percent," said Razia Khan, head of Africa research at Standard Chartered.