After a long-overdue statistical exercise, the Nigeria’s Gross Domestic Product (GDP) has been rebased, presenting a recalibrated view of the country’s economic size and sectoral composition. This process, a standard global practice to ensure national data reflects contemporary economic structures, was the first since 2014. It incorporated previously undercounted sectors such as the digital economy and fintech, producing a revised nominal GDP of ₦372.8 trillion ($243 billion) for 2024, representing a 34.35% increase from the earlier estimate of ₦277.5 trillion. Unlike the enthusiastic reception to the 2014 rebasing that crowned Nigeria Africa’s largest economy, the 2024 revision has invited a more nuanced and sober reflection on the structural challenges that lie ahead on the government’s ambitious quest for a $1 trillion economy.

Figure 1: GDP Size, Pre- & Post Rebasing (₦’ Trillion)

Source: NBS

The Rebasing Process: Capturing Economic Realities

At its core, GDP rebasing is a methodological necessity designed to update the base year for measuring economic activity, ensuring national accounts mirror actual market conditions and structural shifts. In line with international best practices advocated by the United Nations and the International Monetary Fund (IMF), Nigeria advanced its base year from 2010 to 2019 – a period of relative normalcy before the global economic upheaval of the COVID-19 pandemic. For analysts, investors and policymakers, this provides a more accurate, if not more flattering, picture of what truly drives the Nigerian economy today.

Figure 2: Nominal GDP ($’ Billion)

Source: IMF, NBS

The rebasing is more than a mechanical update; it represents a concerted effort to incorporate structural economic changes. New and previously unmeasured sectors such as digital services, fintech innovation, modular refineries, pension fund administration and informal economic activities have been integrated. This accommodates Nigeria’s evolving economic landscape, where emerging industries increasingly contribute to output. The adoption of the 2008 System of National Accounts (SNA), complemented by data from recent national surveys and censuses, heightens the credibility and granularity of the GDP estimates.

The Outcome: Structural Shifts and a Stark Reality Check

While the rebased figures have reshaped the hierarchy of Nigeria’s economic sectors and provide much needed clarity, they also confirm some uncomfortable truths. The broad structure of the economy positions Services (53.1%) firmly at the apex, with Agriculture (25.8%) and Industry trailing in size.

Figure 3: Nigeria’s GDP Structure (%)

Source: NBS

From a developmental perspective, the numbers suggest a regression. Typically, as an economy evolves, the share of agriculture shrinks due to mechanisation and increased productivity, while the manufacturing sector expands. The new data, however, shows that Nigeria’s Manufacturing sector, which is crucially tied to industrialisation, has contracted in relative importance, while agriculture, despite losing its primacy, remains a large but mostly labour-intensive sector, indicative of limited mechanisation and slow industrial transformation. This, for us, is evidence of the lost productivity and inconsistent economic management over the last decade.

This structural malaise is compounded by the stark reality of the GDP in US dollar terms. A decade of persistent currency weakness has meant that while the naira figure has ballooned, the dollar value has collapsed. Nigeria has erased nearly $330 billion from its GDP peak of roughly $574 billion in 2013. The country’s per capita income tells a similarly bleak story, having fallen from $2,100 in 2019 to a meagre $1,095 in 2024.

Digging deeper, Crop Production and Trade retained their positions as the largest and second-largest sub-sectors, respectively. Meanwhile, Real Estate experienced a significant ascent to third place. In contrast, Crude Petroleum and Natural Gas slipped to fifth place from its previous third position, while Telecommunications sustained its rank as the fourth-largest contributor.

Table 1: GDP Contribution (%) – Top 5 sub-Sectors

Source: NBS

The upward revision of the Real estate sub-sector owes largely to improved methodologies for assessing informal housing and rental activities, bringing a more accurate reflection of the true scale of the real estate industry. Nonetheless, the data simultaneously highlights a pervasive challenge: the informal sector accounts for a substantial 42.5% of Nigeria’s economy. This widespread informal activity has profound implications, notably in terms of narrowing the tax base, limiting the effectiveness of government policies due to non-compliance with regulations (labour, environmental, safety, or finance) as well as restricting the growth potential of informal enterprises and workers through their exclusion from formal credit, insurance and banking services.

A Double-Edged Sword for the Federation’s Coffers

On paper, the new figures offer a sliver of good news for the country’s debt managers. A larger GDP denominator automatically improves the debt-to-GDP ratio to 39.4% from 52.13%, below both the government’s 40% threshold and the World Bank’s 55% guideline. This is an encouraging metric that may enhance the country’s creditworthiness and attractiveness to foreign investors – a critical factor with upcoming debt maturities (such as the Eurobond maturing in November 2025). However, it is crucial to emphasise that bigger GDP numbers alone do not equate to fiscal solvency or debt repayment capacity. The ability to service and repay loans depends primarily on the government’s revenue flows, not just the size of the economy. In this case, the corresponding decline in tax-to-GDP (13.5% in 2024) ratio exposes revenue mobilisation frailties, underscoring the imperative for fiscal reforms. Without a commensurate increase in revenue, a larger GDP is merely a vanity metric.

Journey to a $1 Trillion Economy: Ambition Meets Reality

Nigeria’s goal of a $1 trillion economy by 2030 is aspirational yet unlikely under current conditions. While ambition in governance is commendable, the rebased GDP figures, coupled with current growth rates, suggest this goal is exceedingly optimistic. The “simple maths” indicates that for a roughly $240 billion economy to reach $1 trillion in about five years, it would require an annual growth of approximately 33% annually. This is a rate that even China, during its most rapid expansion, did not achieve.

More feasible targets entail reaching $500 billion or $600 billion by 2030, milestones achievable only through profound structural reforms. These include aligning industrial, trade and investment policies to ignite manufacturing growth and local value addition; prudent debt management, potentially through monetisation of state assets; leveraging strategic trade partnerships, notably with China, to drive investment and backward integration; and stabilising macroeconomic fundamentals to eradicate currency volatility and soaring inflation.

Conclusion: A Clearer Picture Illuminates a Steeper Path

The 2024 GDP rebasing serves as a critical reality check, delivering much-needed clarity on Nigeria’s true economic composition and challenges. It reveals an economy that is larger on paper, but with pronounced structural and fiscal hurdles that must be surmounted to achieve inclusive and sustainable growth. While rebasing alone does not translate to better living standards or economic resilience, it provides policymakers with a sharper instrument to diagnose weaknesses, prioritise reforms and mobilise resources strategically. The climb toward a $1 trillion economy is arduous but informed by data that no longer masks fundamental impediments, thereby enabling more focused interventions for Nigeria’s economic transformation.