Nigeria last conducted a rebasing of its GDP in April 2014, when it changed the base year from 1990 to 2010. This resulted in a significant increase in the country’s GDP, making Nigeria the largest economy in Africa at that time.
Also, Inflation rate rebasing by the Nigeria’s National Bureau of Statistics (NBS), updated the Consumer Price Index (CPI) base year in 2021, changing it from 2009 to 2018 to better reflect current consumption patterns.
What is Rebasing?
Rebasing is the process of updating the base year used for economic indicators like Gross Domestic Product (GDP) or Inflation Rate to reflect more current economic realities. The base year serves as a reference point for comparison, so changing it helps ensure that data reflects shifts in economic structure, technological advancements, and new sectors of the economy.
In April 2014, Nigeria rebased its GDP, changing the base year from 1990 to 2010. Before this, the GDP calculation did not properly account for many modern industries and economic activities that had emerged over the years
Key Changes Made in the 2014 GDP Rebasing
1. Inclusion of New Sectors The rebased GDP incorporated industries that were previously not accounted for, such as:
– Telecommunications & Information Services
– Entertainment & Nollywood
– E-commerce & Online Retailing
– Financial Services
– Manufacturing advancements
2.Better Data Collection Methods; The National Bureau of Statistics (NBS) improved data collection processes, using more recent and comprehensive surveys.
3.Growth in GDP Size; After rebasing, Nigeria’s GDP increased by about 89%, making it the largest economy in Africa, surpassing South Africa.
4.Sectoral Shifts
– The share of agriculture in the economy declined from 35% to 22%, reflecting increased contributions from services and industry.
– The services sector’s contribution rose significantly, showing the economy’s transition from agriculture-dependent to more diverse industries.
Nigeria’s Inflation Rate Rebasing (2021)
In 2021, Nigeria also rebased its Consumer Price Index (CPI), changing the base year from 2009 to 2018. The CPI measures inflation by tracking changes in the prices of goods and services over time.
Key Changes in the 2021 Inflation Rebasing
1.Updated Consumption Basket; The items used to calculate inflation were revised to reflect modern spending habits.
2.More Comprehensive Data; NBS included new surveys and more frequent price monitoring to improve accuracy.
3. Adjustment in Weighting; The contribution of different goods and services in the inflation calculation was adjusted based on newer spending patterns.
“As of early 2025, the National Bureau of Statistics (NBS) of Nigeria is preparing to rebase both the Gross Domestic Product (GDP) and the Consumer Price Index (CPI) to better reflect the country’s current economic structure and consumption patterns”
GDP Rebasing (2025)
The upcoming GDP rebasing aims to update the base year from 2010 to a more recent year, capturing significant changes in various economic sectors. This process will incorporate new and emerging sectors that have become increasingly vital to Nigeria’s economy. Notably, the NBS plans to include:
–Marine and Blue Economy: Recognizing the economic activities related to oceans, seas, and coastal areas.
–Arts, Culture, and Tourism: Accounting for the contributions of Nigeria’s rich cultural heritage and tourism industry.
–Information and Communication Technology (ICT): Reflecting the rapid growth in telecommunications, software development, and digital services.
– E-commerce: Capturing the expanding online retail and digital transaction sectors.
CPI Rebasing (2025)
In tandem with the GDP rebasing, the NBS is updating the CPI to reflect current consumption patterns. The base year for the CPI will be changed to 2024, acknowledging significant shifts in consumer behavior and spending. Key changes include:
–Expansion of the Consumption Basket: The number of items in the CPI basket will increase from 740 to 960, encompassing a broader range of goods and services that Nigerians currently consume.
-Updated Classification System: The NBS will adopt the 2018 classification system, replacing the outdated 1999 version. This update will increase the number of CPI divisions from 12 to 13, allowing for more detailed tracking of price changes across different sectors.
The National Bureau of Statistics (NBS) of Nigeria has announced plans to include illegal activities, such as prostitution and drug peddling, in the calculation of the country’s Gross Domestic Product (GDP). This decision aligns with international best practices as outlined in the System of National Accounts (SNA) 2008, which recommends that countries account for all economic activities, regardless of their legal status, to provide a comprehensive picture of the economy
Incorporating these activities aims to capture the full scope of economic transactions within Nigeria, ensuring that GDP figures more accurately reflect the nation’s economic realities. This approach is not unique to Nigeria; several other countries have adopted similar measures to improve the accuracy and comparability of their economic data.
By including such activities in GDP calculations, the NBS seeks to provide policymakers, researchers, and investors with a more complete understanding of the economy, facilitating informed decision-making and effective economic planning.
Several countries have included illegal activities such as prostitution, drug trade, and smuggling in their Gross Domestic Product (GDP) calculations to better reflect total economic activity. Some of these countries include:
1. United Kingdom
The UK began including prostitution and illegal drug sales in GDP calculations in 2014 as part of an effort to comply with European Union (EU) standards on national accounts. The Office for National Statistics (ONS) estimated that prostitution and illegal drugs added around £10 billion to the UK economy.
2. Italy
Italy incorporated prostitution, drug trafficking, and smuggling into its GDP in 2014, following EU guidelines. The move was partially influenced by economic pressures, as higher GDP figures could help reduce the country’s debt-to-GDP ratio.
3. Spain
-Spain also started including illegal activities such as prostitution and drug sales in its GDP calculations in 2014 to align with EU statistical standards. Estimates showed that these activities contributed about 0.87% of Spain’s GDP.
4. Germany
Germany includes illegal activities only if there is sufficient data available. While drug dealing and smuggling are estimated, prostitution has already been legalized and taxed in Germany, so it is naturally included in GDP calculations.
5. Sweden
Sweden has incorporated estimates of illegal drug trade and smuggling in its GDP calculations. However, prostitution is not included, as it is illegal in the country and lacks sufficient data.
6. Canada
Statistics Canada has studied the impact of the underground economy, including illegal drug trade and unreported income, and has made estimates for GDP calculations. Prostitution is not included as it is illegal, but other illicit activities are factored into some economic models.
7. United States
While the U.S. Bureau of Economic Analysis (BEA) does not formally include illegal activities in GDP, some state level studies and independent economic reports estimate their impact. Some underground economy activities, such as off-the-books labor and unreported business earnings, are indirectly accounted for.
