Tinubu’s Trillion-Dollar Economy: Hoping On GDP Rebasing?

BY ZAINAB SULEIMAN OKINO President Bola Ahmed Tinubu has set forth an ambitious vision for Nigeria’s economic transformation—a $1 trillion economy by 2026, with projections reaching $3 trillion by decade’s end. This bold declaration, made at the 29th Nigerian Economic Summit, outlines a roadmap centred on revitalising agriculture, bolstering manufacturing, promoting made-in-Nigeria goods, and supporting […]

BY ZAINAB SULEIMAN OKINO

President Bola Ahmed Tinubu has set forth an ambitious vision for Nigeria’s economic transformation—a $1 trillion economy by 2026, with projections reaching $3 trillion by decade’s end. This bold declaration, made at the 29th Nigerian Economic Summit, outlines a roadmap centred on revitalising agriculture, bolstering manufacturing, promoting made-in-Nigeria goods, and supporting local manufacturers through indigenous sourcing of raw materials. While the timeline has sparked scepticism about its feasibility, there exists a statistical mechanism that might just make this economic utopia achievable: the rebasing of Nigeria’s Gross Domestic Product (GDP).

The National Bureau of Statistics (NBS) has signalled its intention to undertake this crucial economic recalibration, a process long overdue given that Nigeria’s economy was last rebased over a decade ago. In the intervening years, the structural composition of Nigeria’s economy has undergone significant transformation, particularly with exponential growth in technology, communications, and entertainment sectors. The global recognition of Nigerian artists, the expanding influence of Nollywood, and increased internet penetration represent just a fraction of the new economic indices that remain uncaptured in our current GDP calculations.

When Nigeria’s economy underwent rebasing in 2014, the results were nothing short of transformative. Overnight, Nigeria emerged as Africa’s largest economy, surpassing South Africa, with its GDP expanding dramatically from $270 billion to $510 billion. This rebasing exercise revealed Nigeria as the 25th largest economy globally, showcasing a far more diversified and robust economic landscape than previously understood.

Eleven years have elapsed since this recalibration, making another GDP rebasing not merely advisable but imperative. The NBS seems to recognise this necessity, having already announced that Nigeria’s GDP grew by 3.25% year-on-year in real terms during the fourth quarter of 2022. Further data from the bureau indicates that the economy’s aggregate GDP in the final quarter of 2022 stood at N56.76 trillion in nominal terms, compared to N49.28 trillion during the same period in 2021—representing a year-on-year growth of 15.18%.

Against the backdrop of Nigeria’s multifaceted social and economic challenges—skyrocketing prices, runaway inflation partly fuelled by food insecurity resulting from widespread banditry and insurgency—it becomes difficult to envision how President Tinubu intends to realise his economic ambitions without leveraging GDP rebasing. Given our historical experience, such rebasing will undoubtedly inflate economic indicators, potentially creating a pathway toward the trillion-dollar milestone.

Statistical integrity forms the bedrock of effective national planning. A comprehensive GDP rebasing exercise would equip the Nigerian government with essential tools to formulate strategies that genuinely address the dual challenges of economic growth and poverty alleviation. It is only through accurate collection, interpretation, and analysis of data, coupled with precise identification of key economic sectors requiring intervention, that our policy prescriptions can effectively respond to the actual needs of Nigeria’s economy.

Beyond mere numerical adjustments, rebasing facilitates a deeper comprehension of the economy’s structural composition. It illuminates sectoral growth drivers and identifies priority areas where policies and resources should be channelled to stimulate economic expansion, create employment opportunities, enhance infrastructure, and reduce poverty levels across the nation.

The United Nations Statistical Commission recommends that countries undertake GDP rebasing every five years, with some nations conducting such exercises even more frequently. By this standard, Nigeria has already exceeded the recommended interval for this crucial economic assessment. The delay may be attributed partly to the substantial resources required for conducting establishment surveys, agricultural assessments, and population censuses—foundational data that may not yet be fully available.

Nevertheless, significant preparatory work has been ongoing behind the scenes. The groundwork for the current rebasing initiative commenced in 2018, with activities like field surveys, research and development studies, trade and transport margin assessments, and evaluations of water supply, waste management, and remediation services—elements absent from previous rebasing exercises—already integrated into the framework.

As a member of the international community, Nigeria cannot operate in isolation. A nation seeking global respect and recognition, particularly one blessed with Nigeria’s immense population and economic potential, must elevate its profile and credibility through processes like GDP rebasing. While ordinary Nigerians understandably prioritise personal economic well-being (or more accurately, survival), a successfully rebased economy enhances our GDP, strengthening our position in global competitiveness rankings and underscoring the timeliness of this exercise.

If properly managed, a rebased GDP can catalyse numerous positive outcomes: increased foreign direct investment, enhanced revenue generation (especially with new tax reforms), improved global rankings, and positively influenced policy decisions. Emerging data will also inform economic reforms and help stem inflationary pressures that have burdened the populace.

There is no disputing that rebasing serves as a comprehensive measure of overall economic activities while signalling the direction of economic growth. It functions as a barometer for assessing the health of the economy and stands as an internationally recognised indicator for measuring an economy’s size at specific intervals.

At its core, rebasing involves replacing an outdated base year used for compiling volume measures of GDP with a more recent reference point or price structure. Economies are inherently dynamic—they expand, contract, incorporate new sectors, products, and technologies, while consumer behaviours and preferences evolve continually. Rebasing and re-benchmarking account for these transformations, providing a more current snapshot of the economy while enhancing the coverage of economic activities included in GDP compilation frameworks.

“The base year provides the reference point to which future values of the GDP are compared. It is a normal statistical procedure undertaken by the national statistical offices of countries to ensure that national accounts statistics present the most accurate reflection of the economy as possible,” explains the methodology currently employed by the NBS.

The primary benefit of the rebasing exercise lies in its capacity to furnish policymakers and analysts with a more accurate set of economic statistics that truly reflect current realities, enabling evidence-based decision-making. Additionally, it reveals a more precise estimate of the economy’s size and structure by incorporating new economic activities previously excluded from computational frameworks.

For President Tinubu’s ambitious economic targets to materialise within the stipulated timeframe, GDP rebasing emerges not merely as a statistical exercise but as a strategic imperative. While sceptics (and we are many) may question the feasibility of a trillion-dollar Nigerian economy by 2026, a properly executed rebasing process might well bridge the gap between aspiration and achievement, transforming what appears an economic fantasy into a tangible reality.

However, we must acknowledge that genuine economic growth extends beyond statistical adjustments. For ordinary Nigerians to experience meaningful improvement in living standards, the Tinubu administration must complement GDP rebasing with substantive policies addressing infrastructure deficits, security challenges, agricultural productivity, manufacturing capacity, and the overall ease of doing business.

The success of President Tinubu’s vision will ultimately be measured not by statistical milestones alone, but by the extent to which economic growth translates into prosperity for the millions of Nigerians yearning for relief from hardships. The path to a trillion-dollar economy may begin with GDP rebasing, but it must culminate in genuine transformation of Nigeria’s economic landscape.

…Zainab Suleiman Okino is chairman, Blueprint Editorial Board and a syndicated columnist. She can be reached via: [email protected]