Preliminary data from the ongoing rebasing of Nigeria’s Gross Domestic Product (GDP) and Consumer Price Index (CPI) showed a significant shift in the economic landscape. Real estate has now surpassed oil and gas to become Nigeria’s third-largest sector, with crop production and trade, as the first and second positions, respectively.
Agriculture, traditionally Nigeria’s largest sector, previously contributed over 20% to the GDP through its subsectors; crop production, livestock, forestry, and fishing. However, crop production has been reclassified as a standalone industry, emerging as the second-largest sector and contributing 28.65% to the GDP in the third quarter of 2024.
Telecommunications, now separated from the broader information and communication sector, ranks as the fourth-largest contributor. In the third quarter of 2024, the information and communication sector accounted for 16.35% of GDP. Meanwhile, trade, the second-largest sector, contributed 14.78% during that same period.
Under the revised GDP structure, crude petroleum and natural gas, construction, and food, beverages, and tobacco are ranked fifth, sixth, and seventh, respectively. Public administration has been displaced from the top seven sectors.
Growth in the Real Estate Sector
Real estate services demonstrated robust growth in the third quarter of 2024, with a nominal increase of 46.52% compared to the same period in 2023. However, this growth was slightly lower than the preceding quarter. The sector’s contribution to real GDP stood at 5.43% in the third quarter of 2024, a slight decline from 5.58% in the third quarter of 2023.
Despite challenges such as reducing purchasing power, the demand for real estate in Nigeria remains strong. Although estimates of the housing deficit vary, experts suggest the shortfall is approximately 28 million units, requiring 700,000 new homes annually.
Nigeria’s real estate market is projected to reach $2.61 trillion by 2025, with residential real estate dominating the sector, valued at $2.25 trillion. The market is anticipated to grow at a compound annual growth rate of 6.91% between 2025 and 2029, reaching $3.41 trillion by 2029.
The Importance of Rebasing
The National Bureau of Statistics (NBS) started rebasing Nigeria’s GDP and CPI in 2023 to reflect updated economic conditions, a process recommended every five years by the United Nations Statistical Commission. The last rebasing in 2014 resulted in an 89% GDP increase, positioning Nigeria as Africa’s largest economy.
The current rebasing exercise, which adopts 2019 as the new base year (replacing 2010), includes previously unaccounted economic areas such as the digital economy, modular refineries, pension fund administration, and the national health insurance scheme. According to Moses Waniko, Technical Assistant to the Statistician General, this initiative will enhance economic data accuracy, inform better policymaking, and provide a clearer picture of Nigeria’s economic structure.
Waniko highlighted several implications of the rebasing, including its potential to increase the size of the economy, improve economic planning, and refine metrics such as the tax-to-GDP ratio and per-capita income.
Expert Insights on Rebasing Outcomes
Adeyemi Adeniran, Statistician General of the Federation, emphasized the significance of rebasing as a tool for accurate economic measurement and policymaking. He noted that evolving consumption patterns and emerging industries necessitate updates to economic indicators to align with current realities.
Tayo Aduloju, CEO of the Nigerian Economic Summit Group (NESG), likened rebasing to recalibrating the lenses through which Nigeria views its economy, enabling more accurate assessments of its size, structure, and potential.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), stressed the importance of addressing disparities in GDP growth across sectors. He noted that while some sectors exhibit significant growth, others critical to overall economic health remain underperforming, creating an inaccurate representation of the economy’s true state.
A research suggested the rebasing will likely reduce the size of the informal economy and moderate the influence of food and non-alcoholic beverage price changes on inflation figures due to the re-weighting of the CPI basket.
