Ghana set to re-size economy with data revamp

Ghana will by mid-year revamp the reporting of its national economic output to include activities currently excluded from official data, officials said on Friday. However they played down some market estimates that it could boost the Gross Domestic Product (GDP) figure by as much as 50 percent, stressing the move had still not been finalised.

Such moves can be controversial. The European Union blocked a 2006 bid by Greece to add 25 percent to GDP by including activities such as prostitution, while South Africa last year was accused of underplaying the size of its illegal sector. "All I know is that it will significantly affect the size of some of the numbers such as GDP, budget deficit, public debts," Ebo Duncan, head of Ghana's Economic Statistics, told Reuters. "But it is premature to give projections at this stage," he said, adding that the new system was scheduled to be launched in March but could be delayed into the second quarter. The re-sizing of the $16-billion-a-year Ghanaian economy, which later this year is due to benefit from oil revenues from the huge Jubilee field, is expected to include two components that could potentially inflate the GDP level.

The Ghana Statistical Service is preparing to adopt 2006 as the base year for prices rather than 1999 as currently the case. Data will also include new activities such as funeral costs, cash dispenser user charges, air travel and private education. "The basket will be increased to include the informal sector and others also," said Asuo Afram of the statistical service's prices department. The informal sector refers to activities not monitored by the state, such as odd jobs or street trading. Ishac Diwan, the World Bank representative in Ghana, told Reuters the move would prompt many to reassess their view of the Ghanaian economy, already one of the largest in West Africa and one of the few to have launched a Eurobond. The $750 million bond was launched in September 2007.

"It'll change our perception of many things," Diwan said. An increased GDP would have a flattering effect on Ghana's fiscal deficit, which Vice President John Dramani told Reuters this week was expected to fall from around 11 percent of output in 2009 to seven percent by the end of this year. But Razia Khan of Standard Chartered Bank said such effects were not in themselves significant and that the re-sizing move was "interesting but not dramatic". "All economies in Africa are larger than we think they are," she said, adding that any large upgrade could merely serve to highlight how much of the economy was currently escaping the attention of tax authorities. Dramani said Ghanaian growth was already set to increase to at least 5.7 percent this year compared to around five percent last. Analysts polled by Reuters in January said oil revenues would catapult growth to around 15 percent in 2011.