| dc.description.abstract | This issue brief considered the essence of rebasing some macroeconomic variables to examine the rationale for such exercise. The brief simply defines rebasing as replacing an outdated base year with a more recent one to reflect the current structure and dynamics of the economy. It was observed that Nigeria’s less frequent rebasing compared to countries like Kenya and South Africa could limit its ability to capture the full scope of its economic changes, particularly in a rapidly evolving global market. This observation emerged from a rigorous cross country review on GDP rebasing. The brief distills out lessons for Nigeria before documenting the following areas for legislative intervention/concern;
This issue brief draws the attention of the National Assembly (NASS) committees oversighting the MDA responsible for economic management in Nigeria on the need to understand the importance of rebasing in achieving effective distribution of resources, targeting high-growth industries, and closing economic gaps/disparities.
The NASS may wish to pass a resolution advising the National Bureau of Statistics (NBS) to heed the submission of the United Nations Statistical Commission which suggests that Nigeria should rebase its economy, every five years to ensure that the country’s economic indicators remain in line with changing global economic conditions and internal structural shifts.
This brief further highlights the fact that the practice of regular rebasing helps provide more timely and relevant data for evidence based economic legislations, policymaking and investment decisions, giving a clearer picture of economic growth, sectoral shifts, and inflation trends.
The regularity of rebasing also impacts a country’s fiscal policy and decision-making. In countries like South Africa, the frequent updates allow the government to adjust its fiscal policies based on more accurate data, improving public sector planning, budgeting, and debt management.
The NASS is by this brief advised not to be misled by the bloated new size of the GDP all the times Nigeria rebased. It has been demonstrated in this brief that in most instances, the seemingly big sizes of macroeconomic activities are driven mainly by the rate of inflation in the current base year rather than an indication of the economic wellbeing of the people. In other words, GDP is not the best indicator for measuring the standard of living of the people, thus the NASS while oversighting the performance of the executive may look beyond the size of the GDP.
The NASS is further briefed that rebasing has implications for investment decisions, as foreign investors often view a country’s GDP as a measure of market potential. Received evidence from Kenya and South Africa’s frequent rebasing indicates that it helps to maintain a more stable and consistent economic image as well as boosts investor confidence. | en_US |
