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Columnists

Let’s use rebased GDP figures to plan well

I gather that the Kenya National Bureau of Statistics will be announcing the rebased GDP figures next Tuesday.

The new statistics will instantly catapult us to a middle income country.

Indeed, rebased GDP statistics can do wonders to a country. In Nigeria, the process caused the country to instantly overtake South Africa as the biggest economy in Africa.

Nigeria became the 26th biggest economy in the World after it rebased its GDP numbers.

When Ghana used a new methodology to update its national accounts in 2010, it found that its economy was about 60 per cent bigger than it had been previously thought.

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I am sure that the Kenya National Bureau of Statistics will also announce big numbers for Kenya.

I gather from the grapevine that the new process has revealed that our economy is 30 per cent bigger than we have all along assumed.

Is it time for us to celebrate? The answer is no. The new numbers do not imply that every Kenyan will suddenly become richer on Tuesday.

Yes, GDP to debt ratios will have to be adjusted downwards, meaning that we will have more space for external and domestic borrowing.

The rate of unemployment in the country will not change overnight. The rebased statistics will not change the rate of crime, the perpetually rising prices of bread, maize meal and milk- and the frequent power blackouts.

Kenya’s performance on the United Nations Human Development Index will not change on Tuesday next week. Quantitative growth is not the same thing as qualitative development. The nature and structure of our economy is such that high GDP growth will happen in tandem with pervasive unemployment rates and rising crime.

Yes, the rebased GDP figures will show that quantitative growth has been under reported. But quantitative growth is not the same thing as qualitative development.

Higher rebased GDP figures do not mean that we have also performed better in terms other variables of well-being such as inequality, insecurity, bad politics, environmental degradation and human rights violations.

This is not to say that the process of rebasing GDP numbers is an exercise in futility.

As a matter of fact, the UN Statistics Office expects every country to rebase its national accounts every five years to reflect the changes in the economy.

We must look at it as a tool for economic planning. A means to an end. We will have better tools to know how much we produce, how much we consume- and what we invest.

Which brings me to the issue of the quality of our national statistics.

Are the household surveys- those face to face home visits where people are asked what they consume, how much they earn and what they own- conducted as frequently as necessary?

How far have we progressed in the use of technology in collation of house hold statistics.

I refer here to the use of cell phones. Indeed, mobile telephones now allow for surveys to be done not only frequently but continuously.

In some countries, national statistics bureaus now give families cell phones free of charge in exchange for answering a questionnaire say twice a week.

The Kenya National Bureau of Statistics has been suffering from chronic under funding for years.

For a long time, surveys were conducted but not analysed.

The Economic Survey and the Statistical Abstract- the two most important reports from the bureau- had no release calendars.

Industrial surveys are conducted more infrequently than household surveys. Labour market surveys are held few and far between.

Which is why when you ask about the rate of unemployment, the likelihood is that you will get a number that means nothing.

In the era of devolved system of government where resources are distributed on the basis of population, poverty levels and other indices, the quality of statistics will become more and more critical.

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