The National Bureau of Statistics (NBS) of Nigeria, in charge of publishing key economic data in the continent’s most populous country, has unveiled a freshly ‘rebased’ economic landscape, presenting seemingly rosier inflation figures and a reshuffled GDP hierarchy. While hailed by some as a necessary statistical update, for Nigeria’s precarious startup ecosystem, this exercise in ‘mending’ key economic figures risks obscuring harsh realities and creating a new set of challenges.

The headline drop in inflation, now at 24.48% in January from a previously reported 34.80% using the old CPI template, offers a superficial balm to anxieties over spiralling prices. Food inflation, a visceral concern for most Nigerians, also appears to have softened under the rebased methodology. Similarly, the GDP rebasing exercise showcases a more diversified economy, with real estate eclipsing crude oil as a leading sector.

However, beneath the veneer of statistical improvement lies a crucial caveat, explicitly stated by the NBS itself: the decline in rebased inflation does not mean the general price level was declining. This statistical sleight of hand, achieved through a more recent base year and an updated consumption basket, essentially recalibrates the yardstick without fundamentally altering the inflationary pressures bearing down on Nigerian businesses.

For startups, operating on thin margins and battling relentless headwinds, this ‘mending’ of economic data carries a hidden cost — the potential for misinterpretation and misplaced optimism.

The Illusion of Easing Pressures

The immediate danger is that the rebased inflation figures will be perceived as a genuine easing of economic hardship. While technically accurate within the confines of the new methodology, for a startup founder grappling with day-to-day operational costs, the lived experience of high prices remains unchanged. Rent, energy, raw materials, and labour — the fundamental expenses crippling nascent businesses — are not magically reduced by a statistical adjustment.

This creates a dangerous illusion. Startups, particularly those seeking investment or attempting to forecast future performance, may be tempted to rely on the rebased figures as indicators of a cooling economy. This could lead to flawed financial projections, underestimation of operational expenditure, and ultimately, a rude awakening when confronted with the persistent reality of high costs.

Policy Paralysis 

Perhaps a more insidious cost is the potential for policy inaction. If the rebased data, however technically massaged, is interpreted by policymakers as a sign that inflation is ‘under control’ or moderating, the urgency to address the structural drivers of inflation may dissipate.

Nigeria’s startups desperately need concrete policy interventions: improved infrastructure, streamlined regulations, and enhanced access to finance. If the perceived ‘improvement’ in inflation metrics leads to complacency at the policy level, the vital reforms needed to create a genuinely enabling environment for startups may be further delayed. This translates to a direct cost for startups — prolonged exposure to a hostile operating environment where survival, let alone growth, remains a constant struggle.

The GDP rebasing, with its elevation of sectors like real estate, also presents a nuanced challenge. While diversification is generally positive, the re-ranking risks skewing investment attention towards sectors that appear statistically dominant under the new calculations.

Startups in sectors that may not feature as prominently in the rebased GDP — perhaps those in nascent technology fields, innovative manufacturing, or social enterprises — could inadvertently find themselves further down the pecking order for investment. If investor sentiment is swayed by the reshuffled sector hierarchy, crucial funding may flow towards already established sectors, potentially stifling the diversification and innovation that startups are uniquely positioned to deliver.

For startups, the onus now falls on navigating a more complex and potentially misleading data landscape. Relying solely on headline rebased figures is a recipe for strategic missteps. Founders must: Go beyond surface-level analysis and understand the methodological nuances of rebasing. Scrutinize the NBS reports to grasp the implications, not just the headlines. Prioritize lived experience and on-the-ground market intelligence over potentially massaged macroeconomic indicators. Focus on managing real operational costs, not chasing statistical mirages. Advocate for greater transparency from the NBS in communicating the limitations of rebased data. Demand clear contextualization to prevent misinterpretations by policymakers and the public.

The True Cost of ‘Repainting’:

Nigeria’s economic rebasing, while presented as a technical upgrade, carries a significant, albeit less visible, cost for its startup ecosystem. This cost is not measured in naira and kobo, but in the potential for misinformed decisions, policy inertia, and misdirected investment. For startups already battling immense odds, the price of this statistical ‘mending’ may be a further entrenchment of the very challenges they are striving to overcome. The imperative now is for vigilance, critical analysis, and a steadfast focus on demanding genuine economic reform, not just a cosmetic statistical makeover.