Nigeria is to "rebase" its gross domestic product (GDP) on Sunday 6 April, which should push it above South Africa as the continent's biggest economy. But what it rebasing, how it works, and will it make any difference?

People walk struggling for space between public transport buses and trucks at the bustling Lagos bus stop. Photo: AFP/Getty Images

What is rebasing?
Rebasing is defined by the United Nations as the "process of replacing present price structure [base year] to compile volume measures of GDP with a new or more recent base year". In other words, it's a need to update a country's national statistics.

Economies are dynamic things; they grow, they shrink, they add new sectors and technologies and people's behaviours change. One of the uses to which GDP data is put is to track how the economy grows over time. So, as GDP numbers are only relevant when compared to other GDP numbers, the year that serves as the base for their comparison needs to change as well to reflect the changes in the economy. There are basically two ways to measure GDP, the sum of a country's goods and services.

Firstly, nominal GDP. This is the sum value of all produced goods and services at current prices. This measure does have its uses. But real GDP is more widely used and is slightly different. It's the sum value of all produced goods and services at constant prices and is useful for showing how the economy changes in size and - with some further manipulation - how average living standards change over time. The constant prices are the ones from the base year - whichever that is.

The mobile phone industry is now massive in Nigeria - 25 years ago, it did not exist

Why is it necessary?
Rebasing is necessary simply because economies change over time. Different goods are produced and new technology is introduced, so rebasing means that the statistics give the most up-to-date picture of an economy as possible. Most country do it at least every three years or so. But Nigeria's old GDP base year is 1990.

Back then, the country had one telecoms operator with perhaps 300,000 phone lines. Now it has a whole mobile phone industry with tens of millions of subscribers. So without rebasing the statistics from the mobile phone sector, it would remain somewhat under-represented.

Likewise, 24 years ago there was only one airline. Now there are a whole plethora, the information of which needs to be captured better in the national figures.

Some analysts say that switching the base year to 2010 will boost the country's GDP by as much as 65% - on paper.

Why hasn't Nigeria done this for 24 years?