By Deborah Ayoade
Rebasing of gross domestic product (GDP), is a practice most countries frequently use to keep up to date with economic output.
There are two specific purposes for this, firstly rebasing helps the country to account for changes in the patterns of economic activity, i.e. the consumption and production. The second reason is to account for inflation by updating base prices.
It seems however, that Nigeria have been lacking behind and have failed to carry out rebasing, as it has been 24 years since the Nigerian authorises last rebased its GDP.
Having forsaken this practice for a considerable amount of years, the Nigerian government finally actioned the long overdue rebasing and recalculation of the country’s GDP. This call to action came as the Nigerian authorities noted that its current statistical data was out of date and were unable to get a clear performance of the country without the accurate statistical data, thus a rebasing had to be employed.
Results of the rebasing was announced on Sunday 6th April by the Nigerian Bureau of Statistics, that the country’s GDP stands at $510 billion dollars, officially making Nigeria the largest economy in Africa; overtaking South Africa as the 24th largest economy in the world.
The new figure comes as a result of the Nigerian authorities now factoring in many of its booming sectors such as the film industry often referred to as Nollywood, music industry, service industry and telecommunications.
Nigeria generates $600 million dollars a year from its thriving film industry; its film industry has created millions of jobs and produces a large bulk of films making it the second biggest film industry in the world, after Hollywood.
In addition, the Telecommunications industry in Nigeria is truly exploding; in the sub-Saharan Africa, Nigeria and South Africa are the largest mobile markets, with some 120 million phone subscribers in Nigeria’s 170 million populous. By incorporating these factors into Nigeria’s GDP this made a huge difference from what we thought was a $270 Billion dollar economy to a $510 Billion dollar economy.
The new GDP figure raises Nigeria profile; leaving many to wonder now that Nigeria has been crowned the largest economy on the African continent, will it fuel a rivalry with South Africa?
Many foreign investors have been eyeing the Nigerian economy since reports that it was now part of one of the fastest growing economies in the world with economists coining the term MINT for Mexico, Indonesia, Nigeria and Turkey.
This new metric could muster up a competitive fight for the Nigeria’s investor capital. Also Nigeria may argue the case that rather than South African they should rightfully be the economy that represents Africa in the G20 summits and should also be considered as verified members of the BRICS group, the group that consists of the most powerful emerging economies of which include Brazil, Russia, India and China. The S stands for South Africa whom no longer holds the title on its continent.
Only time will tell what the new GDP figures will bring to Nigeria’s economy, we can only hope for good things.
The whole continent can be uplifted if the two countries smartly stride along together.