Rebasing reveals gaps in Nigeria’s growth narrative

In a country once defined by oil, Nigeria’s economy is undergoing a quiet transformation. The real engine of growth is no longer found in pipelines or refinery gates, but in fields, markets and smartphones.

A recent change in how the economy is measured has brought this shift into sharp focus. Known as GDP rebasing, the exercise updates the way the country calculates its economic output, using fresher data to reflect how Nigerians actually earn and spend. And the results tell a different story.

The long-held image of an oil-fueled, industry-led economy is fading. Agriculture and services have grown in prominence, while industry especially manufacturing, has shrunk.

The new breakdown

Based on the old calculation method using 2010 prices, Nigeria’s 2019 economy was estimated to comprise 22.1 percent agriculture, 27.7 percent industry, and 50.2 percent services. The revised data tells a different story: agriculture now accounts for 25.8 percent, industry has dropped to 21.1 percent, and services have grown to 53.1 percent.

The numbers may seem technical, but the implications are deeply personal. Agriculture’s rise reflects what rural households already experience: Farming is central to survival, not a last resort.

Economy gaps

Still, not everyone is convinced this reflects real progress. “In my opinion, while the rebasing is timely, productivity has not increased in the real sense. We are still operating below potential,” said Abdulbasit Shuaib, an economist who works for a multinational company.

His concern is echoed in parts of the country where daily realities still don’t match the story that rebased data suggest.

The sharp drop in industry signals the deepening struggles of factories facing power cuts, high input costs and unclear regulation. Services, meanwhile, remains the real growth story, from logistics and mobile banking to barbershops and social media marketing.

What’s changing on the ground?

For the average Nigerian, this shift means the economy is finally catching up with lived experience. Most people don’t work in oil rigs or factories. They sell, deliver, sew, code, plant or drive. These activities once sidelined in policy conversations are now the country’s economic core.

The rebasing makes one thing clear: Nigeria’s economy is not just about exports or revenue from crude oil. It’s about people making things work in a difficult environment often informally, often without support.

This should shape how governments plan, analysts say. Investing in rural roads, irrigation, mobile connectivity, and urban transport would go further than another tax break for oil multinationals. If agriculture and services are where people find work and income, then that’s where support should go.

Pain in the factory belt

Industry’s decline is more than just a statistical dip. It’s a sign that local manufacturing once seen as the great hope of economic diversification is in distress. Many firms are scaling back or shutting down due to unreliable electricity, multiple taxes, expensive imports and crumbling infrastructure.

The Manufacturers Association of Nigeria (MAN) said that 767 manufacturers shut down operations while 335 became distressed in 2023.

(BusinessDay)