The federal government has reaffirmed its dedication to adopting international best practices when it comes to conducting the Nigeria Living Standards Survey (NLSS) and rebasing the Gross Domestic Product (GDP) and Consumer Price Index (CPI). This was recently mentioned by Dr. Vitalis Obi, Permanent Secretary of the Ministry of Budget and Economic Planning during a gathering with experts in Abuja. Rebasing the GDP and CPI in accordance with international standards, in Obi’s opinion, will provide a more accurate picture of the economy, taking into account the influence of modern technologies.
This will allow lawmakers to create more lucrative economic policies, he asserted. Obi went on to state that the rebasing procedure entails changing the weights applied in these economic computations as well as the base year. He mentioned that the NLSS evaluates Welfare circumstances and household consumption. Updating the basket of goods and services used to compute the CPI, he stressed, will improve our understanding of Inflation trends, which is essential for maintaining price stability.
Nigeria’s economy was last rebased in the year 2014.
Since the last rebasing initiative, Obi said, significant structural changes have occurred in a number of sectors, especially in light of the swift growth of digital and technology-related industries including fintech, e-commerce, and digital services. It’s worth remembering that Nigeria implemented its last economic rebasing in 2014. This procedure entailed revising the nation’s Gross Domestic Product estimates to account for more precise economic sectors and activities. Subsequently, Nigeria’s GDP grew by almost 89% as a result of the rebasing, making it one of the biggest economies in Africa.
At the time, the country’s GDP stood at roughly $510 billion from approximately 270 billion dollars prior to the rebasing. Due to a more positive perception of Nigeria’s economic potential among investors, the higher GDP number helped the country attract foreign direct investment. The rebasing complied with international standards for GDP computation by adhering to the System of National Accounts (SNA) criteria. The base year was changed from 1990 to 2010, taking into account more recent developments and economic activity. Nigeria’s Economy hasn’t been rebased since, but as the economy changes, talks about rebasing in the future are still ongoing.
Implementing global best practices for rebasing in Nigeria.
Meanwhile, the most recent Nigeria Living Standards Survey was conducted in 2018/2019. Updated information on household living conditions, income, consumption, and other socioeconomic factors was provided by this survey. The results serve as crucial for comprehending the dynamics of Poverty and guiding policy choices. It showed that almost 40.1% of Nigerians were below the country’s poverty line, underscoring the major obstacles to reducing poverty. To guarantee coverage across diverse regions, urban and rural areas, and socioeconomic classes, the survey employs a stratified sample approach.
Aligning with the International Monetary Fund (IMF) and World Bank guidelines, such as the System of National Accounts for GDP and the Consumer Price Index Manual for CPI, is one of the crucial steps towards implementing global best practices in Nigeria’s rebasing of the GDP and CPI. It involves conducting national surveys to acquire current information on prices, economic activity, and consumer trends. In order to increase precision and effectiveness, it also entails utilizing contemporary statistical software and tools for data analysis and visualization.
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Other steps may include adopting mechanisms to assess the rebasing process’s efficacy and make required modifications in response to input. Employ sampling techniques that are supported by science to guarantee representative data for various locations and populations. Incorporate a variety of viewpoints and areas of expertise into the rebasing process by involving statisticians, economists, and business specialists. Nigeria may improve the precision and applicability of its GDP and CPI statistics by implementing these best practices, which would ultimately help more effective economic planning and policymaking.