NBS to include modular refineries, illegal activities in GDP rebasing

By Kunle Sanni

The National Bureau of Statistics (NBS) has announced that its upcoming rebased gross domestic product (GDP) data, set to be unveiled by the end of January, will incorporate modular refineries, illegal activities, and other previously excluded sectors.

The rebased GDP will also capture contributions from the Nigerian Social Insurance Trust Fund (NSITF), digital economic activities, pension fund administrators, domestic households as employers of labor, the National Health Insurance Scheme (NHIS), and quarrying and mining activities.

According to a report published by TheCable Newspaper on Thursday, Moses Waniko, Technical Assistant to the Statistician-General, revealed these updates during a sensitization workshop on GDP and consumer price index (CPI) rebasing in Lagos. The event was organized by the Nigerian Economic Summit Group (NESG) in collaboration with the NBS.

Explaining the rationale behind selecting 2019 as the rebase year, Waniko noted it was a period of relative economic stability compared to recent years that experienced significant disruptions.

“2019 was picked as the rebase year because other sector-specific administrative data for this period were collected,” Waniko said. “We avoided using 2020, 2021, and 2022 as base years due to economic instabilities caused by global and local shocks. This aligns with IMF guidelines.”

Waniko stated that the rebasing process is nearing completion, with validation and dissemination of results expected by the end of January.

“We are looking at the end of January to launch and disseminate the numbers. Post-rebasing activities will also follow,” he added.

Waniko emphasized that rebasing would significantly impact the economy, potentially increasing its size and offering better insights for economic planning.

“Rebasing provides a clearer trajectory for the economy, reflecting the actual size and structure of various sectors,” he said. “We expect the economy’s size to be bigger, which could lead to a reduction in the debt-to-GDP ratio and an increase in per capita income.”

Waniko also highlighted how the rebased data would inform taxation and economic development strategies, noting that the tax-to-GDP ratio would likely see adjustments.

Inclusion of Illegal Activities
Baba Madhu, an Assistant Director at the NBS, explained that illegal activities such as drug peddling and commercial sex work might also be included in the new GDP calculations.

“These activities, though illegal, contribute to the economy,” Madhu said. “For example, some individuals engaged in drug trade or prostitution earn significant income, sometimes surpassing those in the formal sector. The challenge lies in gathering accurate data and navigating legal barriers.”

Madhu emphasized that illegal economic activities are included in GDP calculations in some countries and provide a more comprehensive view of economic realities.

Reflecting Structural Changes
In October 2024, Adeyemi Adeniran, Statistician-General of the Federation and CEO of the NBS, announced plans to rebase the GDP and CPI to reflect current economic realities and structural shifts.

“The new GDP and CPI rebasing will give us a more accurate picture of the Nigerian economy and account for changes in sectors like digital technology, informal labor, and emerging industries,” Adeniran stated.