As Nigeria moves to rebase its Gross Domestic Product at the end of January, certain sectors are expected to show substantial growth.
Among the sectors expected to benefit most from this exercise are the Marine and Blue Economy, Art, Culture, Tourism, Creative Economy, Information and Communication Technology (ICT), and Innovation and Digital Economy.
While all these sectors are likely to show an increased contribution to GDP, experts predict that the ICT and entertainment industries will record the most significant growth. Muda Yusuf, former Director General of the Lagos Chamber of Commerce and Industry, told Techpoint Africa that “a clearer picture of these sectors’ value to the economy after the rebasing will likely attract more domestic and foreign investments.”
This projection comes at a critical time, as foreign direct investment (FDI) in the telecommunications sector—a key component of Nigeria’s ICT ecosystem—has faced sharp declines. Data from the National Bureau of Statistics (NBS) reveals that capital inflows into the telecommunications sector, which peaked at $113.4 million in Q2 2024, plummeted by 87% to $14.7 million in Q3, reflecting ongoing challenges in the industry.
Although investment data for Nigeria’s entertainment and creative sector remains limited, Yusuf believes that improved performance indicators, coupled with recent government initiatives, suggest growing interest and opportunities in this industry.
Why Rebasing Nigeria’s GDP Matters
In September 2024, Adeyemi Adeniran, Statistician General of the Federation and head of the NBS, announced plans to rebase Nigeria’s GDP and Consumer Price Index (CPI) to align with global best practices.
The United Nations (UN) and the International Monetary Fund (IMF) recommend that countries rebase their national data every five years to capture the dynamics of their economy and update their database. While Nigeria is five years overdue, having last conducted the exercise a decade ago in 2014, experts insist that it is still a necessary and timely step.
“For this kind of data collection exercise, there is no perfect time for it. While the UN recommends a five-year interval, Nigeria is not too late to the game,” Yusuf noted.
The IMF defines GDP as the monetary value of final goods and services produced within a country over a specific period. Over time, changes in prices, consumer behaviour, industry trends and economic structure affect GDP, making periodic recalculations necessary to capture an accurate picture of the economy. Rebasing involves recalibrating GDP figures to reflect these changes by replacing an outdated base year with a more recent one.
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Explaining the rationale, Adeniran stated, “Economies, as you know, undergo structural changes over time—for example, the growth of the tech sector and the decline of traditional manufacturing. The rebasing exercise helps account for these shifts, offering a more accurate snapshot of the economy’s composition.”
In this instance, the NBS plans to replace the current base year of 2010 with 2019 to better reflect Nigeria’s economic reality. In a statement issued earlier this month, the NBS emphasised the importance of the rebasing exercise in providing accurate data for evidence-based decision-making.
The Bureau insists that the updated figures will help the government identify growth-driving sectors and efficiently allocate resources to areas with the greatest potential.
Armed with robust data, the government will be in a better position to “grow the economy, create jobs, improve infrastructure, and reduce poverty,” the NBS said.
ICT, creative sectors as growth drivers
Long before the digital boom triggered by the COVID-19 pandemic, the ICT was a significant contributor to Nigeria’s economic output.
In 2015, four years before the pandemic hit, the sector generated about ₦6.97 trillion representing 8.69% of GDP. Fast forward to the third quarter of 2024, the ICT sector ranked as the third-highest contributor to Nigeria’s economy, accounting for 13.9% of total GDP.
Experts credit this growth trajectory to higher mobile penetration, widespread adoption of digital technologies, and improved access to internet services nationwide, underscoring the crucial role of the telecommunications sub-sector.
Speaking in a media interview, Sheriffdeen Tella, a professor of economics at the Olabisi Onabanjo University, Ago-Iwoye, Ogun State pointed out that “Nigeria’s ICT sector has been growing significantly in the past two decades. The use of mobile phones to access the internet and perform many tasks is on the increase globally, not just in Nigeria. But that is the main driver of the growth in the country’s ICT sector.”
On his part, Yusuf described the ICT sector as an enabler for developing other critical sectors including education, healthcare, agriculture, and manufacturing. “In terms of sectors that are strategic to job creation and overall economic development, ICT emerges on top. The reason is that this sector is not encumbered by structural challenges unlike what we have with manufacturing or agriculture. Those two sectors are constrained by logistical challenges, such as bad roads, port congestion and poor power supply,” the former DG added.
On the investment front, the fintech and e-commerce subsectors dominated last year, with startups like Moniepoint raising an impressive $110 million in funding, even amid an overall decline in sector-wide investments.
Similarly, in 2022, Nigeria’s creative economy contributed approximately $5.6 billion to the nation’s GDP, with significant inputs from visual media ($2.7 billion), music ($1.4 billion), and fashion ($600 million). A year later, the motion picture and music recording segments accounted for roughly ₦154 billion (approximately $197.6 million) of Nigeria’s GDP.
Looking ahead, the federal government has unveiled strategic plans to generate at least $100 billion annually and create over two million jobs from Nigeria’s creative economy.
This positive growth trajectory is behind the ambitious projections that these sectors will generate significant investments in the coming years.
“The moment we have this rebasing of GDP we are likely to have data that is more robust and of better quality so that will give a clear indication of what sectors are doing well, what sectors are emerging and what sectors are contracting. It will give a clear signal to investors, both local and foreign, of sectors that have prospects for growth,” Yusuf affirmed.
