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Business News of Friday, 20 February 2009

Source: financial intelligence (charles k. amoah)

Debate over 2008 GDP

Deputy Gov’t Statistician sets record straight

The Deputy Government Statistician, Prof N.N.N Nsowah-Nuamah, has said that the debate over Ghana’s growth rate for the 2008 fiscal year should be put on hold for the next five months, explaining that figures making the rounds at this time of the year are highly unreliable. Commenting on the differing quotations of the 2008 GDP estimates that had propped up from the statistical office at various times, Prof Nsowah-Nuamah explained that data on economic activity keep trickling in throughout the year, and not until the final data for all components are received, “any GDP figure that is flying around is based on incomplete data and is highly unreliable”.

The statistician emphasized that it was too early to start debating data for 2008, saying that GDP estimates for an immediate past year cannot be dependable in January of the following year.

He said a more complete data on the economy could be available between April and June, when final statistics for the past year would have been obtained from industry and other sectors of the economy.

“Not until we get all data, and are certain the remaining could not bring about any significant change, the figures remain subject to revision until a provisional figure is settled upon,” he stated, adding that the actual figure is authenticated only after a year or two.

In response to public inquisition during the political season and in line with recent November budget presentations, the GSS in November quoted a provisional GDP growth of 6.7% for 2008. The figure, the GSS explained, was based on data obtained through the first half of 2008, and from extrapolations through the remaining half of the year.

The Statistical Service also in January quoted a GDP growth rate of 6.2% which captured available data through September 2008.

News about a current quotation of 7.2% from the same office however appears to be an unwelcome message for sections of the political divide, as it stands to give the past government a higher mark against accusations on their lack of fiscal prudence towards the end of their tenure.

Whilst some social commentators argued that the statistical office had concealed the current data and cooked figures that could appeal to the new administration, others were of the view that the data could be inaccurate.

But the Deputy Government Statistician explained that the Ghana Statistical Service (GSS) employed time-tested and internationally acclaimed methodologies in measuring economic data, and gave the assurance that the institution would remain professional and continue to live beyond reproach.

The immediate past government had in its 2008 budget targeted a GDP growth rate of 7%, after seeing the country through a period of sustained growth.

GDP had jumped from 3.7% in 2000 through 4.2% in 2001, 4.5% in 2002 and 5.2% in 2003. Before peaking at 6.4% in 2006, Ghana’s GDP grew by 5.6% in 2004 and 5.9% in 2005.

Even though the energy crises that hit the country’s industrial sector slowed growth to 6.3% in 2007, Ghana remained ahead of the average growth rate in the African region.