Nearly a third of Africa’s gross domestic product (GDP) is not being captured accurately in current statistics. According to Professor Mthuli Ncube, the chief economist and vice-president of the African Development Bank (AfDB), current GDP statistics do not reflect present day economic realities.
Addressing delegates at the AfDB’s annual meetings in Rwanda, Ncube said 30% of GDP in Africa is not being measured properly because some countries have not conducted GDP rebasing for more than 20 years.
Last month Nigeria rebased its GDP data after 24 years, making it Africa’s biggest economy. Nigeria is now estimated to be worth US$510bn, almost twice the $264bn at which it had been valued before rebased GDP statistics were released on April 6.
Ncube urged other African countries to follow Nigeria’s move, noting that it would have a dramatic effect.
“The size of the African economy at the moment is about $1.52tr after Nigeria’s rebasing exercise,” said Ncube. “The impact of this exercise of rebasing would be quite dramatic. That is why I think that 30% of GDP in Africa… is not being measured properly. A lot is happening and you will see dramatic changes with rebasing.”
The 2014 African Economic Outlook report released by the AfDB projects the average growth of GDP on the continent at 4.8% this year and 5.7% next year.
“In order to sustain the economic growth and ensure that it creates opportunities for all, African countries should continue to rebuild shock absorbers and exercise prudent macro management. Any slackening on macro management will undermine future economic growth,” said Ncube.
Whose Africa is rising?
AfDB President Donald Kaberuka said there is a need for transformation to ensure Africans feel the effects of economic growth. According to the bank, about 48% of Africans live in poverty.
“Whose Africa is rising?” asked Kaberuka. “In fact, there is a story now in Senegal that you don’t eat economic growth. People are asking: ‘The economies are growing, and so what?’”