Will Nigeria's rebased GDP reflect real growth?

Nigeria's National Bureau of Statistics is gearing up to release the country's new rebased consumer price index and gross domestic product reports. This development is highly anticipated by analysts who expect the numbers to reflect real growth and potentially influence the decision-making process of the Monetary Policy Committee. Esili Eigbe, Director at Escap Management, recently discussed the potential impact of these reports on CNBC Africa. In the interview, Esili highlighted key points that shed light on the complexities of interpreting the data and navigating the implications for monetary policy decisions and economic reforms. Esili pointed out that the rebase of the consumer price index (CPI) might not lead to a significant easing of pressure on the monetary authorities. While some adjustments in the CPI components could alleviate certain aspects, such as lowering food prices, the increase in services could potentially contribute to higher inflation rates in the long run. As a result, the impact of services on CPI tends to lag behind other factors, posing challenges for managing inflation effectively. Furthermore, Esili emphasized that the rebased GDP should be viewed as a statistical exercise rather than a structural solution to economic challenges. The GDP update alone is unlikely to address issues like inflation, currency volatility, and unemployment. While the data may offer clarity to policymakers, the focus should remain on addressing fundamental economic issues that require targeted interventions and sustained efforts. Regarding monetary policy decisions, Esili expressed caution about expecting a swift transition from a hawkish to a dovish stance by the central bank. Despite potential improvements in economic indicators, such as reduced downside risks and enhanced investor confidence, a gradual and strategic approach to monetary policy adjustment is essential. Esili recommended a balanced and proactive stance by the central bank to navigate uncertain economic conditions and ensure stability in the financial markets. In terms of currency stability and the strength of the Naira, Esili acknowledged the positive developments in the exchange rate but underscored the ongoing challenges of anchoring inflation and sustaining economic growth. While the Naira's stability provides a favorable environment for businesses and investors, the need for continuous monitoring and proactive measures to mitigate downside risks remains critical. Esili cautioned against complacency and emphasized the importance of maintaining prudent monetary policies to safeguard the stability of the currency. As Nigeria awaits the release of the rebased GDP and CPI reports, the discussions with experts like Esili Eigbe shed light on the nuanced considerations surrounding monetary policy decisions and economic reforms. The analysis provided by Esili serves as a reminder of the complex economic landscape in Nigeria and the necessity of strategic planning and coordinated efforts to address the underlying challenges and foster sustainable growth.