by Abigail Anaba

What is rebasing the GDP?

The United Nations defines rebasing as the “process of replacing present price structure [base year] to compile volume measures of GDP with a new or more recent base year”. Basically, it’s a need to update a country’s national statistics. http://www.bbc.com/news/world-africa-26873233

Why is there a need for rebasing the GDP?

Most governments overhaul GDP calculations every few years to reflect changes in output and consumption, such as telecoms, financial services and internet usage, but Nigeria has not done so since 1990 (about 23 years) suggesting that the previous GDP framework underestimated economic activity. http://businessdayonline.com/2013/12/nigerias-economy-largest-in-africa-as-rebasing-boosts-gdp-to-405bn/

When was the last time Nigeria rebased her GDP?

In 1990

Why the need now?

The new GDP series will (however) be tracked by potential investors, such as suppliers of consumer goods and services – FBN capital research analysts led by Gregory Kronsten quoted in http://businessdayonline.com/2013/12/nigerias-economy-largest-in-africa-as-rebasing-boosts-gdp-to-405bn/

To identify sectors that have been left out in the nation’s GDP for 15 years – Labaran Maku reported in here: http://www.channelstv.com/home/2014/04/02/nigeria-ready-to-rebase-gdp-to-boost-economic-growth/

How often should economies be rebased?

Experts say every three to four years.

What bodies are part of the present rebasing?

The Ministries of Finance and National Planning, The Chief Statistician to the Federation and international agencies like International Monetary Fund, IDB and the African Development Bank.

What is Nigeria’s current GDP?

$510 billion – Dr. Yemi Kale, Statistician-General of Nigeria.

What does rebasing mean to the average Nigerian?

For the average person on the street rebasing does not have any meaning – Pat Utomi

No point trying to use the new GDP number to rank or rate anything. What matters is how this new number changes over time – Nonso Obiliki

To a non-economist, this explanation may be a little bit better for easier understanding. Let’s say

1. I didn’t know how much was in several accounts I own and then someone advised I get accountants to come and calculate it. I still don’t have more money than I did before.
2. Now I know what I am really worth and I can stand with certain people who earn as much. For instance I can join the exclusive billionaires club.
3. I can also present my new status as collateral when I want to borrow money.
4. People can also choose to discuss certain business ideas with me because they know I can fund it.
5. I now have bragging and perception rights.
6. If this new status helps me make more money I will thank the person who insisted I do it for starters.
7. But no thanks really until my new status begins to yield dividends.
8. All you have done is tell me what I’m worth… okay, some thanks for that.