GDP: Nigeria to change base year to 2008

The National Bureau of Statistics has said that the country is set to change the base year for its Gross Domestic Product from 1990 to 2008.The Statistician-General of the federation, Mr. Yemi Kale, said on Thursday that the move, which has been scheduled for January 2012, would capture the current real economy, taking into account the growth of sectors like telecoms.He added that measure could lead to a huge jump in the estimated size of the country.Reuters quoted Kale as saying in an interview in Abuja that, When we do it next year, we expect a huge jump in GDP because we have been using 1990 and the structure of the Nigerian economy has changed since then. There have been a lot of changes in the Nigerian economy, for example, we now have a telecom sector, which did not exist in the 90s.The estimated output of Ghana rose by 60 per cent, catapulting it into the ranks of the middle income countries, when she made a similar move to recalculate its GDP.Most governments overhaul their GDP calculations every few years to reflect changes in output and consumption, such as the advent of mobile telephony and the Internet. But Nigeria has not done so since 1990.If Nigerias $247bn economy is revised upwards as much as Ghana did, it would almost be as big as South Africa economy, the continents top economy, with a GDP of $422bn.Arguably, the effect on Nigeria could be even more pronounced since Ghanas rebasing was only from 1993, and not 1990. Turmoil in Egypt this year enabled Nigeria to overtake the North African nations economy, which is now valued at $232bn, to take the second place.An emerging market strategist at Standard Bank, Mr. Samir Gadio, said, The implication is that GDP per capita will subsequently increase, making Nigeria a more attractive investment case and potentially boosting consumer stocks.An economist at CSL Stockbrokers, Mr. Alan Cameron, said the move , which has involved International Monetary Fund assistance, would make its debt look better but diminish its tax revenue as a percentage of GDP, as Ghanas move did, as well as its trade surplus.A revision to the base year would improve Nigerias budget deficit and debt ratios, as well the relative size of the import burden. It exposes the weakness of a tax net that is already small and would reduce the relative size of the current account surplus, which has been shrinking anyway, he added.
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