The National Bureau of Statistics (NBS) has announced its intention to incorporate illegal and hidden economic activities, such as prostitution and drug peddling, into the calculation of Nigeria’s Gross Domestic Product (GDP). This move is part of a broader GDP and Consumer Price Index (CPI) rebasing exercise aimed at aligning Nigeria’s economic data with global standards.
The announcement was made during a sensitization workshop organized in collaboration with the Nigerian Economic Summit Group (NESG). As part of the process, 2019 has been proposed as the new base year for GDP, while 2024 will serve as the base year for inflation computation.
Explaining the rationale for selecting 2019, the bureau cited the year’s relative economic stability compared to subsequent years, which were marked by the COVID-19 pandemic and significant policy shifts.
The rebased GDP is expected to provide a more comprehensive picture of Nigeria’s economy by capturing emerging sectors like the digital economy, pension fund administration, and modular refineries. It will also include previously overlooked areas, such as domestic households employing labor and the activities of the National Health Insurance Scheme (NHIS) and the Nigerian Social Insurance Trust Fund (NSTIF).
Dr. Baba Madu, Head of National Accounts at the NBS, explained the inclusion of illegal activities in GDP calculations, stating that it adheres to the 2008 System of National Accounts (SNA), an internationally accepted framework.
“Activities like drug trade or prostitution, though illegal here, are key drivers of some countries’ economies,” Madu said. “While these are not legally sanctioned in Nigeria, they generate significant income—sometimes even more than the formal sector. The challenge lies in legal recognition and data collection, as hidden economies often arise from underreported income or unregistered trade.”
He noted that these activities currently account for less than 3.5% of Nigeria’s GDP but are consistent with global standards for economic measurement.
Statistician General Prince Adeyemi Adeniran underscored the importance of the rebasing exercise, highlighting its role in ensuring Nigeria’s economic indicators remain accurate and relevant.
“The rebasing is a vital exercise that ensures our economic indicators are current and accurate reflections of the economic realities on the ground. As economies evolve and new industries emerge, it becomes imperative to update our statistical measures,” Adeniran said.
He emphasized that the updated data would provide a clearer economic picture, supporting better policymaking, strategic planning, and governance.
Dr. Tayo Aduloju, CEO of the NESG, also highlighted the benefits of GDP rebasing, drawing attention to its impact on national credibility and fiscal health.
“After the 2014 rebasing, Nigeria’s debt-to-GDP ratio fell from 19% to 11%, improving our fiscal health and enhancing creditworthiness. This transparency made Nigeria more attractive to foreign investors, who value clarity and growth potential,” Aduloju noted.
He added that accurate data sharpens policymaking by offering a more detailed economic overview.
The NBS has reaffirmed its commitment to executing the exercise with professionalism, aiming to provide a robust foundation for strategic decision-making and national development.
