NBS’s GDP and CPI Rebasing: Experts Question Integrity and Methodology

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Jeremiah Ayegbusi

NBS's GDP and CPI Rebasing: Experts Question Integrity and Methodology

The Nigerian Bureau of Statistics (NBS) has initiated GDP and CPI rebasing, which “Global Business Report” on Arise News scrutinized. Experts Professor Uche Uwaleke, capital market professor at Nasarawa State University and president of the capital markets academics of Nigeria and Basil Abia, Co-founder and policy analyst at Veriv Africa. discussed these updates’ implications for economic perception, policy, and public trust.

Mr. Basil Abia’s Perspective

Mr. Basil Abia strongly advocates for rebasing economic indicators like GDP and CPI every five years to keep them relevant, in line with global standards.

He criticizes the Nigerian Bureau of Statistics (NBS) for changing the CPI price reference period from 2022 to 2024, suggesting this shift might aim to present inflation in a more favorable light.

Mr. Basil Abia warns that setting 2024, a year of peak inflation, as the CPI base could lead to misleadingly low inflation figures, disconnecting official statistics from Nigerians’ economic realities. He highlights discrepancies in NBS’s inflation data compared to his organization’s independent analysis, which showed food inflation at a staggering 92%, indicating potential issues with data accuracy or manipulation.

He stresses the importance of methodological transparency and calls on professionals to critically engage with NBS’s methods to ensure economic data reflects true conditions, influencing policy, investment, and public trust appropriately.

Professor Uche Uwaleke’s Perspective

Professor Uche Uwaleke emphasizes the critical role of GDP rebasing in economic planning, attracting investments, and shaping policy by potentially revealing a larger economy, thus improving ratios like debt-to-GDP.

Professor Uche strongly opposes the inclusion of illegal activities like drug trafficking and prostitution in GDP calculations. He argues this not only risks legitimizing these activities but also complicates the measurement due to the inherent difficulties in gathering accurate data on such activities. His concern is both moral, about not endorsing illegal practices, and practical, regarding data reliability and public perception.

He points out the significant cost and effort required for such exercises, using the National Living Standards Survey as an example. Uwaleke is against including illegal activities in GDP calculations, citing both moral and practical concerns about data legitimacy and accuracy.

He supports using 2019 as a stable base year for GDP rebasing and stresses the connection between accurate inflation rates and sound monetary policy, warning against complacency with artificially lowered inflation figures.

He appreciates the digitalization and expansion of the CPI basket for better data integrity. Uwaleke calls for a transparent, rigorous approach to statistical rebasing, aiming to align economic statistics with actual economic conditions to serve the public and inform policy effectively.

Policy Implications

Rebasing can impact fiscal and monetary policy directly. A larger GDP might allow more government borrowing for development. On the monetary side, lower CPI inflation might prompt easing of interest rates, but this carries the risk of underestimating inflation if the data misrepresents the reality. Accurate rebasing is crucial for sound policy-making.

Public Perception and Socio-political Impact

Rebased figures must align with public economic realities to maintain trust. If statistics suggest improvement while citizens experience hardship, skepticism could grow.

Transparency and education in economic statistics are vital to bridge this gap. Misleading inflation data could lead to public discontent or political unrest if not addressed, emphasizing the importance of clear communication and credibility in economic reporting.

Nigeria’s Economic Standing Internationally

Nigeria’s GDP rebasing to include booming sectors like technology, fintech, and creative industries could strengthen its position as Africa’s largest economy, showcasing economic diversity and resilience. This could attract more foreign direct investment by presenting Nigeria as a dynamic market.

However, its global standing depends on how other African nations like South Africa and Egypt manage their economic statistics. While rebasing might enhance Nigeria’s appeal internationally, it faces challenges like ensuring data integrity and translating growth into real benefits for its citizens. Analysts are optimistic, predicting Nigeria could aim for a $1 trillion economy by 2030 if it sustains growth in non-oil sectors and implements supportive policies.

Jeremiah Ayegbusi

Jeremiah Ayegbusi is an economist and former Academic Officer of the Nigerian Economic Students Association, Redeemer's University Chapter (NESARUN). He analyzes economic news and conducts research for long-form analysis, leveraging his strong academic foundation and passion for insights.