The rebasing of Zambia’s Gross Domestic Product – GDP value this year may fail to take off due to slow implementation and delayed release of funds by the treasury, a source has told the Zambian Business Times – ZBT.
GDP rebasing was lauded as a way to recalibrate and measure the current size of the economy as well as improve efficiencies such as revenue collection (tax to GDP ratio) as well as support key country ratios such as debt to GDP ratio that is used as a key parameter in assessing a country’s debt load.
Last year, Minister of Finance Margaret Mwanakatwe during the budget speech announced that Government will undertake an exercise to rebase the country’s GDP in 2019, an exercise last conducted in 2012. This exercise was later supported by institutions such as the Economic Association of Zambia – EAZ and some independent financial analysts.
“Mr. Speaker, in 2019 Government will undertake an exercise to rebase the Gross Domestic Product, an exercise last conducted in 2012. The rebasing of the Gross Domestic Product will provide reliable and updated information on the current size and structure of the national economy. The rebasing will also provide Government with an opportunity to update and develop appropriate social and economic indicators to measure progress in achieving the objectives under the National Development Plans and the Sustainable Development Goals,” she said.
However, a source whose identity has been withheld has told ZBT in an exclusive interview that no funds have so far been released for the rebasing exercise as earlier announced by the finance minister. The last update that the ZBT got was that about $5 million is needed for the rebasing exercise to be a successful and completed on time.
“The pronouncement by the minister of finance that government has set aside funds for the rebasing of the country’s GDP is just mere words. In reality government has not released the requisite funds. The source indicated that multilateral partners such as the IMF, World Bank or African Development Bank can be called upon to assist with the required funds for the conducing of the rebasing exercise before its too late,” the source said
The source stated that its un-disputable fact that knowing the accurate size and structure of the economy is as important as the economy itself. It is an invaluable input in national development planning and helps the government know whether or not the country is growing or contracting and which industries are the key drivers and which ones need tinkering.
In addition, knowing the size and structure of the economy helps government assess its performance by disaggregating the source of economic performance.
We may all recall that Nigeria’s GDP was rebased from about US$270 billion to US$510 billion for 2013 with the increase of about 90% attributed to new sectors of the economy such as telecommunications, movies & performing arts industry, and retail which were previously either not captured or under-reported. As a result of the rebasing, Nigeria is now the largest economy in Africa beating South Africa which had dominated the top slot for many years.
