WERE: Why most African countries understate the size of GDPs


Ideas & Debate

A trader serves customers at the Makola Market in Accra, Ghana. The West African country rebased its economy last week. The move is likely to add 30 to 40 per cent to the size of its economy. PHOTO | AFP 

Last week, Ghana announced that it is recalculating its gross domestic product (GDP) based on measurements from 2013 instead of 2006 to more accurately reflect recent activity in the petroleum, communication technology and construction sectors. The rebasing will likely add 30 to 40 per cent to the size of Ghana’s economy.

The rebasing is a reflection of how the size of African economies is often understated. This understatement is informed by three factors.

First, the actual number and size of businesses actively operating…

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