According to the report of Statistics South Africa (SSA), rebasing the Gross Domestic Product (GDP) has pushed the economy of Africa by 11 percent. And Nigeria is still holding up the top position of itself in Africa’s economy.
Due to rebasing exercise, South Africa’s economy has increased to $370 billion during the fiscal year of 2020.
And rebasing of South Africa’s GDP results in the growth of Nigeria 5.01 per during the second quarter of 2021.
World Bank and National Bureau of Statistics (NBS) are taking Nigeria’s GDP at $432.29 billion, which shows that it is more significant than Africa’s $62.29 billion before rebasing.
How did rebasing helped?
According to South Africa’s statistics agency, this would’ve only been possible by rebasing the GDP and benchmarking the exercises. Also, by manipulating the strategy of demand and supply.
SSA’s reports also stated that rebased GDP is more significant than 11 percent of previous years’ GDP.
The percentage differenced has varied several times from 2014 to 2020. And according to the current reports, in 2014, it was around 8.4 percent, and now in 2020, it is 11 percent. And this has been only possible due to the rebasing and the benchmarking.
Is rebasing really helping?
According to the reports, the revised GDPs in 2010 of the OECD countries was around 3.8 percent, which ranges from Luxembourg to South Korea by 0.2-7.8%.
Latin America’s recorded increase is 8.8 percent, and the revised size of the economy of Botswana is down by 10 percent. Then the question which arises here is, How is Africa standing with revised GDP affect?
After Egypt and Nigeria, South Africa ranks as the third biggest economy on the continent in terms of purchasing power parity.
Africa still lags behind Nigeria despite the rebasing of an 11 percent increase.
The latest growth rates are consist of 3 consecutive growth in the following quarters whereas two falls in second and third.
The Q2, 2021 growth rate was way higher than the negative impact of -6.10 percent in Q2, 2020. This shows the return in the business and economic activity despite Covid-19 restriction worldwide.
Signs of Winning
The gradual increase of commercial activity and the local and international trades results in a recovery in 2020.
From time to time, it grew from -2.18 percent to 2.70 percent in 2021. Also, the results seem in the quarterly growth. It may have happened that there was a decline in the economic activity due to the seasoning activity, but it’d later on recovered.
Reacting to all such development, Dr. Muda Yusuf told that the prosperous economy’s growth matters a lot in an interview.
As the economy increases, it opens up several opportunities for investing, job creations, profits, and welfares. However, the size of the economy is not only the responsible factor. The quality of life of people is what that also matters.
The Needed Improvement
Currently, Nigeria and South Africa are the leading economies in Africa. Still, they are facing several problems such as health, poverty, unemployment.
All this is happening due to the unawareness among the people. Recently many riots and loots have happened on an enormous scale.
That’s why the governments of South Africa must build the model social policies. It is way essential to have policies to fill up these gaps. And so for that, the government should invest in the resources such as education, healthcare, etc.
Investing in such resources is not the only beneficiary for the people but also the country in the future.
Investing in economic resources can also help deal with problems such as inflation, cost of productivity, etc.