Nigeria’s recent GDP rebasing, which updated the base year from 2010 to 2019, offers a nuanced lens on the country’s economic trajectory and reveals critical structural and fiscal challenges that must be addressed for sustainable development.
The Nigerian Economic Summit Group’s (NESG) August 2025 report on this rebasing exercise presents both encouraging statistics and sobering realities, reshaping perceptions of the Nigerian economy’s size, composition, and performance in the post-pandemic era.
The NESG is an independent, non-partisan, non-sectarian organisation, committed to fostering open and continuous dialogue on Nigeria’s economic development. The NESG strives to forge a mutual understanding between leaders of thought to explore, discover and support initiatives to improve Nigeria’s economic policies, institutions and management.
Larger economy in statistical terms, but deeper challenges beneath
The rebased nominal GDP for 2024 is now estimated at N364.6 trillion, a substantial 35.4 per cent increase over the previous base year estimate of N269.3 trillion. This statistical expansion underscores Nigeria’s enduring stature as Africa’s largest economy in naira terms.
However, the nominal growth belies significant economic vulnerabilities. When measured in U.S. dollars, Nigeria’s GDP peaked at $636.7 billion in 2022 before plummeting sharply to $246.6 billion in 2024. This decline is largely attributed to severe currency depreciation stemming from foreign exchange reforms, which have drastically eroded the country’s global economic footprint and purchasing power.
The rebasing also reveals a more severe contraction due to COVID-19 than previously recorded. Real GDP data show a seven per cent drop in 2020, a deeper decline than the former estimate of 1.9 per cent. The pandemic’s economic scars have lingered; Nigeria’s real GDP only returned to pre-pandemic levels in 2023 after three years of sluggish recovery. This protracted recovery undermines narratives of a rapid post-COVID rebound and highlights persistent disruptions in industrial production and trade.
Structural imbalances: Shrinking industry amid growing informality
The rebasing paints a clear picture of structural imbalances within Nigeria’s economy. The industrial sector, encompassing oil and gas, manufacturing, construction, and other industries, has continued to weaken, with its GDP contribution falling from 21.1 per cent in 2019 to 16.7 per cent in 2024. Oil and gas output remains below pre-pandemic levels, constrained by production shortfalls, infrastructure deficits, and investment challenges. Manufacturing has suffered from high input costs, energy insecurity, and limited access to foreign exchange for raw materials, exacerbating Nigeria’s de-industrialisation risks.
Conversely, the report spotlights the resilience and growth of informal economic activities, which now underpin an estimated 42.5 per cent of GDP. Agriculture, trade, and real estate sectors have expanded their shares, driven largely by informal, low-productivity operations. While informal activities provide critical buffers during economic shocks, absorbing displaced labour and sustaining livelihoods, they also dampen productivity growth, constrain fiscal revenues due to low tax compliance, and perpetuate precarious employment conditions.
Strategic pathways toward formalising these sectors, through regulatory simplification, credit access expansion, and social protection, are essential to unlock their growth potential.
Fiscal and financial realities: Illusive fiscal space amid debt and revenue constraints
The rebasing exercise has recalibrated Nigeria’s fiscal ratios, painting a cautiously optimistic yet challenging picture. The debt-to-GDP ratio appears reduced to 40.6 per cent in 2024 from the previous 55 per cent, suggesting more fiscal headroom. The fiscal deficit correspondingly narrows. However, these improvements are statistical rather than substantive: the government’s revenue-to-GDP ratio falls to an alarming 2.59 per cent, among the lowest worldwide. This low revenue base severely limits fiscal capacity, impeding debt servicing and critical public investment needed for growth.
In addition, financial intermediation metrics remain shallow. The credit-to-private-sector ratio shrinks to 20.7 per cent of GDP, while the market capitalisation of the Nigerian Stock Exchange amounts to only about 17.2 per cent of GDP, far below international benchmarks. These constraints highlight underdeveloped financial markets, high borrowing costs, and limited access to affordable capital for businesses, which stifle entrepreneurial dynamism and industrial expansion.
Policy imperatives for accelerating resilient and inclusive growth
The NESG report stresses that the nominal expansion revealed by GDP rebasing should not breed complacency. Instead, it calls for a resolute shift toward productivity-led growth underpinned by targeted policies and institutional reform. Key priorities include revitalising Nigeria’s industrial base through energy sector stabilisation, logistical improvements, tax incentives, and infrastructural investments aimed at boosting manufacturing, oil and gas, and construction.
Agriculture, despite its informal characteristics, presents a strategic advantage. Scaling mechanisation, expanding irrigation, enhancing rural transportation, and developing agro-processing hubs are vital steps to raise productivity, value addition, and export diversification within the sector.
Formalisation of informal enterprises is crucial to broaden the tax base, improve working conditions, and expand access to credit and technology. Policy reforms should focus on reducing regulatory burdens, enhancing microfinance availability, and extending social protection to smaller businesses to foster sustainable economic inclusion.
On the fiscal front, reforms must prioritise expanding non-oil revenues via digital tax administration, broadening the tax net, and improving compliance mechanisms. Public spending should shift from incremental budgeting toward performance-based allocations, fostering accountability and efficiency. Deepening financial markets through credit reforms and institutional strengthening is necessary to mobilise private capital and finance the real economy effectively.
Addressing the erosion of household welfare caused by currency depreciation and inflation is imperative. Strengthened social protection schemes, expanded health insurance, higher education quality, and workforce training will be essential to equip Nigerians for higher-productivity sectors and improve living standards.
Leveraging the rebasing for real transformation
Nigeria’s GDP rebasing provides a clearer, more accurate view of the country’s economic size and structure. Yet, it simultaneously exposes the fragility underlying the headline figures—fragility borne of currency instability, low productivity, fiscal constraints, and structural imbalances. The rebasing is a pivotal diagnostic tool highlighting the gap between Nigeria’s enlarged economic footprint and the real welfare and growth outcomes experienced by its citizens.
To convert this statistical uplift into tangible prosperity, Nigeria must pursue cohesive reforms that catalyse industrial revival, promote agricultural modernisation, formalise informal activities, and recalibrate fiscal and financial systems. The choices made today will determine whether Nigeria’s economy remains a larger figure on paper or becomes a resilient engine of inclusive, sustainable growth.
