How to boost GDP stats by 60% - BBC News Sign in 24.10.22, 12:47 Home News Sport Reel Worklife Travel Future Search BBC Home War in Ukraine Coronavirus Climate Video World UK Business Tech Science Stories More ADVERTISEMENT How to boost GDP stats by 60% 9 December 2012 Top Stories LIVE Sunak favourite to be new UK PM as Johnson pulls out Ukraine denounces Russia's 'dirty bomb' claims 8 hours ago The cost of occupation in Kherson region 22 hours ago Features By Laura Gray BBC News Hollywood reflects as new Weinstein trial begins In 2010 Ghana announced a 60% increase in GDP estimates and Nigeria may soon follow suit. But how can the economies of these African countries seemingly grow overnight? https://www.bbc.com/news/magazine-20639775 Page 1 of 5 How to boost GDP stats by 60% - BBC News 24.10.22, 12:47 The answer is in the maths. To calculate GDP in countries where data is sparse like Ghana or Nigeria, government agencies select a "base year" - a year when unusually good data on the economy is available. They then add on the extra data they collect each year to get a rough idea of economic growth. In 2010 Ghana changed its base year from 1993 to 2006, and this led to a jump in GDP and the conclusion that, in previous estimates, about $13bn (£8bn) of economic activity had been missed. As a result, Ghana was upgraded from a low-income to a lower-middle-income country. The top US Senate races to watch in 2022 midterms Nigeria is widely expected to announce a change in its base year from 1990 to 2008, although it won't be clear until the calculations are done what exactly this will do to GDP figures. "When there are big structural changes in an economy the base year can quickly become outdated and that's exactly what happened in Ghana," says Todd Moss, development scholar and blogger at the Center for Global Development in Washington. cel More people in more places trust BBC News than any other news source. Register for a BBC account to see why. New ground as tech aims to help boost soil health Register "The services sector basically exploded and the way they were calculating it they were assuming the services sector was still quite small so they were grossly underestimating Ghana's growth and economic activity." Political interference was partly to blame for the slow rebasing of the Ghanaian economy. Until 2000 most institutions were not independent enough to be able to put out their own views and their own data, argues Sydney Casely Hayford, a business and financial analyst from Ghana. India celebrates Diwali with dazzling lights New East African oil pipeline sparks climate row 'When I couldn't fix George, I climbed a mountain' https://www.bbc.com/news/magazine-20639775 Page 2 of 5 How to boost GDP stats by 60% - BBC News 24.10.22, 12:47 Ghana finally rebased in 2010, in part because of pressure from the IMF and the World Bank. But are the figures now reliable? The cost of occupation in Kherson region Sydney Casely Hayford, who has been studying the development of Ghana's economy over the last 10 years, says the GDP figure could still be out by between 10-20%. "Until we are able to go in and do a proper quantification of the informal economy in this country it is uncertain exactly what degree of variation we have in our GDP figures. "The figures are better but they are still wrong. "We've settled into a particular lethargy. Now that we've been able to come to the 60% adjustment we've le_ it there and we are not looking to see how we can refine that and make sure that it is accurate consistently, so I think there is a little bit more work that can be done." Who are the men who rule China now? But what impact do poor statistics actually have? Morten Jerven, author of Poor Numbers: How We Are Misled by African Development Statistics and What to Do about It, says they can have tangible consequences. "These kinds of statistics are vital to international organisations and nongovernmental organisations that for instance provide aid to Ghana. Now Ghana is a middle-income country it is according to that statistic not eligible for concessional lending from the World Bank for instance," he says. How beetroot juice is fuelling elite athletes Without accurate GDP figures we cannot make cross-country comparisons or rank countries convincingly. Elsewhere on the BBC The most disgusting films ever made Bicycle sales are one measure of economic activity But GDP figures are not the only useful measure of economic activity, argues Todd Moss. Other indicators such as mobile phone ownership, the sale of bicycles or other consumer goods and even lights at night can all play a part. How job insecurity affects https://www.bbc.com/news/magazine-20639775 Page 3 of 5 How to boost GDP stats by 60% - BBC News So who is to blame for the bad statistics? 24.10.22, 12:47 How job insecurity affects your health "In many countries the statistical office is like an orphan. I've encountered cases where the minister is not even aware that the statistical office is under his ministry," says Shanta Devarajan, The World Bank Chief Economist for Africa. But, the revision of the figures seen in Ghana, and due soon in Nigeria, should be interpreted as good news overall says Devarajan. "It is a sign of progress that we have more up-to-date statistics." 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The word Tolkien coined for hope You can follow the Magazine on Twitter and on Facebook Related Internet Links Center for Global Development (CGD) Most Read 1 Exam 'anti-cheating' hats go viral in Philippines 2 King Charles to sell 14 of Queen's horses 3 Ukraine denounces Russia's 'dirty bomb' claims 4 Focus on Mordaunt as Tory contest deadline looms 5 Doctor Who: Jodie Whittaker's replacement revealed 6 Brazil politician throws grenades at police 7 The political guard is changing again 8 UK doomed without Brexit rethink, warns Tory backer 9 Filmmaker blames Ghana Statical Service The World Bank (Africa) The BBC is not responsible for the content of external sites. https://www.bbc.com/news/magazine-20639775 Page 4 of 5 How to boost GDP stats by 60% - BBC News 24.10.22, 12:47 9 Filmmaker blames TikTok for abusive video comments cost of occupation 10 The in Kherson region ADVERTISEMENT BBC News Services On your mobile On smart speakers Get news alerts Contact BBC News Home News Sport Reel Worklife Travel Future Culture Music TV Weather Sounds Terms of Use About the BBC Get Personalised Newsletters Privacy Policy Cookies Why you can trust the BBC Accessibility Help Advertise with us Parental Guidance Contact the BBC AdChoices / Do Not Sell My Info © 2022 BBC. 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