Nigeria used this one weird trick to achieve astronomical GDP growth in almost no time.
What happened: Nigeria’s economy became roughly 30% larger this week after the country’s statistics bureau reformulated its GDP calculations. The biggest change was that the bureau now uses 2019 as the base year it compares current economic data against instead of 2010.
- This “rebasing” is necessary for all countries on occasion when calculating GDP to accurately reflect the evolution of prices.
- And it’s particularly important for developing nations as their economies change and evolve so rapidly.
Big picture: Nigeria’s new calculations now also account for once-ignored sectors like digital services, pension funds, and the informal labour market, and better represent the growing economic influence of several sectors like fishing, shipping and ports, tourism, and culture.
Why it matters: GDP is the be-all and end-all of economic stats. It’s a quick shorthand for a country’s broader health, is used in countless other statistical formulations, and informs all sorts of important functions for a national economy from servicing debt to negotiating trade.
Zoom out: That said, the GDP bump doesn’t change too much for Nigeria. It remains Africa's fourth-largest economy (it was the largest until a currency devaluation in 2023) and is still contending with the fallout from sky-high inflation.—QH