In November 2010, the

government of Ghana The Government of Ghana was created as a parliamentary democracy, followed by alternating military and civilian governments in Ghana. In January 1993, military government gave way to the Fourth Republic after presidential and parliamentary electi ...

made a number of changes to the way it calculated GDP, resulting in a 60% upward change in its estimate. The change led to discussion of the accuracy of GDP estimates, particularly in the context of Africa. It was also the first of many rebasings undertaken by African economies, most of which led to significant upward revisions in their estimates of GDP.

Changes made

Change of base year

The base year for calculations was changed from 1993 to 2006. In a paper discussing the change, development economists Morten Jerven and Magnus Ebo Duncan noted: "Upward revisions stemming from changes in outdated base years are common in developed countries such as the United States (Runkle 1998)" and also said that one contributor to the high magnitude of the upward revision was the huge increment in base year (by 13 years) as opposed to more regular updates done in countries such as the United States.

Change in compilation methodology

The compilation methodology was changed from one based on the 1968

System of National Accounts The System of National Accounts (often abbreviated as SNA; formerly the United Nations System of National Accounts or UNSNA) is an international standard system of national accounts, the first international standard being published in 1953. Handbo ...

(SNA) to the 1993 SNA. In a speech at the IARIW-SSA conference, World Bank economist

Shanta Devarajan Shanta Devarajan is Senior Director for Development Economics (DEC) and a former Acting Chief Economist of the World Bank Group. He previously served as Chief Economist of the World Bank’s Middle East and North Africa Region, Principal Economis ...

identified this as the main cause for the huge upward bump in GDP.

Improvement and revision of data sources

New and better data sources were used for the new GDP series.

Change in industry classification

The new GDP series used the

International Standard Industrial Classification The International Standard Industrial Classification of All Economic Activities (ISIC) is a United Nations industry classification system. Wide use has been made of ISIC in classifying data according to kind of economic activity in the fields of emp ...

(ISIC) version 4.

Effect on data series

Total GDP estimate went up by 60%

The news brief from the Ghana Statistical Service announcing the change noted that the new GDP series estimated a 60.3% larger GDP in the base year 2006 than the old GDP series. This number of 60% would be echoed by other sources discussing the matter. This would contrast with the 2015 India GDP rebasing, which would result in a slight downward revision of India's total GDP estimate.

Sectoral distribution of GDP changed but trends remained similar

The new method showed lower shares in GDP of agriculture (dropped by about 8 percentage points) and industry (dropped by about 8 percentage points) and a compensatory higher share in GDP of services (increased by about 16 percentage points). Trend lines for all three sectors were fairly similar between the new and old series. This would contrast with the 2015 India GDP rebasing, where the share of services in GDP would be revised downward and the share of industry would be revised upward.

Reception by development economists

Immediately after the announcement, Todd Moss wrote in the

Center for Global Development The Center for Global Development (CGD) is a nonprofit think tank based in Washington, D.C., and London that focuses on international development. History It was founded in November 2001 by former senior U.S. official Edward W. Scott, directo ...

blog: "Boy, we really don’t know anything." Moss noted that Ghana had been one of the more heavily scrutinized economies of Africa, and that Moss had himself done a Ph.D. on Ghana, yet the numbers were so off. This made him pessimistic about the quality of statistics for other countries. On October 6, 2011,

World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...

economist, penned a blog post titled ''Africa's statistical tragedy'', a wordplay on Easterly and Levine's classic ''Africa's Growth Tragedy''. In the post, Devarajan noted that the absence of high-quality statistical data hampered Africa, development economists and international institutions, and donors, but that the problem could be rectified. In August 2012, ''Revising GDP estimates in Sub-Saharan Africa: Lessons from Ghana'' by Morten Jerven and Magnus Ebo Ducan was published in ''The African Statistical Journal''. Jerven also wrote about the issue in ''

The Guardian ''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...

'' in November 2012, leading to additional commentary from ''

The Washington Post ''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large nati ...

''.

References

{{Reflist, 30em Economic history of Ghana Presidency of John Atta Mills 2010 in Ghana