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Ghana leapt into the world ranking of middle-income countries on Friday with a new measure of its economy that will add over 60 percent to its output figure by better reflecting recent growth areas such as mobile telephony.The long-awaited move, which comes just weeks before the West African country is due start pumping oil, means its debt and deficit levels will automatically fall as a proportion of its gross domestic product.

By prodding annual per capita income above the $1,000 mark, it will also mean that Ghana leaves the World Bank's low-income bracket of countries such as Liberia and Afghanistan to join the more affluent ranks of Thailand and Ivory Coast.
"There has been a significant change in the size of the economy due to the re-basing of our national accounts which captures the realities of the current period," government statistician Grace Bediako told a news conference in Accra.

"So yes, we are there," she said of the World Bank's so-called lower-middle-income bracket. "Just that our production has to increase so that we can sustain it."

After the announcement the yield on Ghana's $750 million 2017 Eurobond eased slightly from just above six percent to 5.878 percent. The cedi was flat at 1.44 to the U.S. dollar.

The rebasing means that 2009 GDP originally measured at 22.598 billion cedis is now put at 36.867 billion cedis -- an increase of around 63 percent.

Bediako put GDP per capita for the current year at $1,318.36 provisionally against an existing estimate of $753.
Until now, Ghana used a 1993 measure of economic activity seen not fully reflecting growth in areas such as banking and telecommunications since then. The new measure is based on a 2006 snapshot that gives greater weight to those activities.

"The number is probably bigger than most people had been expecting, which was in the region of 40 percent or so," said Stephen Bailey-Smith of Standard Bank.

"It makes Ghana look better compared to its peers and it should be upgraded," he added.

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By jumping into the lower end of the middle income bracket, Ghana no longer qualifies for concessional loans from the World Bank's International Development Association (IDA) arm.

However it comes just as Ghana readies to issue a new Eurobond and could allay concerns over its public finances which in August prompted Standard and Poor's credit agency to lower sovereign ratings for Ghana to "B" from "B+".

Finance Minister Kwabena Duffuor acknowledged last month that spending such as the cost of a new public sector wage deal would mean next year's budget deficit would touch 7.5 percent of GDP rather than the 3-5 percent range initially expected.

Standard Chartered's Razia Khan noted the re-basing would automatically make deficit and debt levels appear more benign but would also mean its tax revenue collection as a ratio of GDP would slide below the average for sub-Saharan African countries.

"This will call into question how much room there is for policy manoeuvre to correct this," she added.

According to the re-based index, Ghana's economy will grow by 6.6 percent in 2010, the statistics office forecast, compared to the five percent growth most analysts had been expecting.

The re-basing means the services sector now accounts for 51 percent of the economy; agriculture -- the one-time leader -- makes up 30.2 percent; and the industrial sector 18.6 percent.
 

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So just like that an overhauling of data used to measure economic activity can make a country wealthier?
I checked on CIA factbook, and it already said from 2009 that Ghana's GDP (PPP) was $35.83 billion, $15.5 billion (nominal), and per capita income (PPP) at $1,500. So something's a lil....fishy. :sly:
 

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èđđeůx;66599507 said:
So just like that an overhauling of data used to measure economic activity can make a country wealthier?
I checked on CIA factbook, and it already said from 2009 that Ghana's GDP (PPP) was $35.83 billion, $15.5 billion (nominal), and per capita income (PPP) at $1,500. So something's a lil....fishy. :sly:
That is PPP GDP per capita, the one they are referring to is nominal per capita.

This NDC government is cluleless but I dont have a problem with it if there were REAL problems with the old method. But from what I heard even the WB and IMF said Ghanas GDP was underestimated. There should be one standardised method of calculating I think because it makes comparisons more easy.
 

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This sounds like it's good only on paper, but I'm sure that a higher GDP will make the country more attractive for investors.
Apparently the old figures didnt take into account certain sectors and the method they were using was based on when Ghana was a primarily agarian country. This new method takes into account things like oil exploration and forrestery plantations and also the growth in the services industry. As long as they didnt try to include the informal economy Im happy.

Many people before had already said that Ghanas GDP was surpisingly low. But most people predicted 40% rather than 60% more.

Will be interesting to see how this, plus the oil money, will change Ghanas HDI- I expect there will be a big jump in Ghanas HDI for 2014 then (which uses data from 2011).
 

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Apparently the old figures didnt take into account certain sectors and the method they were using was based on when Ghana was a primarily agarian country. This new method takes into account things like oil exploration and forrestery plantations and also the growth in the services industry. As long as they didnt try to include the informal economy Im happy.

Many people before had already said that Ghanas GDP was surpisingly low. But most people predicted 40% rather than 60% more.

Will be interesting to see how this, plus the oil money, will change Ghanas HDI- I expect there will be a big jump in Ghanas HDI for 2014 then (which uses data from 2011).
That makes sense.

but what you need to know is that the economy is larger mainly in the sense of overall wealth, but this does not really reflect on the people.

Like in Nigeria we take into account all that Oil industry etc, but when it is all said and done it simply distorts the wealth in the country.

For example Nigeria's most endowed state in Oil and Gas has a GDP per capita similar to Indonesia, but the reality is different.

yes Ghana's economy may be larger and rightfully so, but when you factor in Oil wealth it is actually distorting the economy. And before you say I am hating on Ghana, I am saying the same about Nigeria. The Nigerian economy is distorted.
 

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That makes sense.

but what you need to know is that the economy is larger mainly in the sense of overall wealth, but this does not really reflect on the people.

Like in Nigeria we take into account all that Oil industry etc, but when it is all said and done it simply distorts the wealth in the country.

For example Nigeria's most endowed state in Oil and Gas has a GDP per capita similar to Indonesia, but the reality is different.

yes Ghana's economy may be larger and rightfully so, but when you factor in Oil wealth it is actually distorting the economy. And before you say I am hating on Ghana, I am saying the same about Nigeria. The Nigerian economy is distorted.
Well Ghanas GDP is already distorted by gold anyway. All the firms are foreign and very little of the money stays in Ghana. As a %, a government gets a LOT more from oil than a solid mineral like gold.

I guess there is always this talk on SSC that Africas GDP is much bigger due to the informal sector but we do also forget the "phantom" contribution to GDP from mining which in reality- ends up back in the USA or UK or wherever.
 

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What Ghana needs to do is have local contribution in those sectors

We are already doing that in Nigeria, we are changing our Oil sector.

So more of the Oil wealth will stay in Nigeria and more of the local companies and people will be empowered.

We are doing this with a enforceable legislation that must be adhered to by every company in the sector. It is called the "Local content Bill"

Nigeria will get billions of dollars from that bill.


Ghana should do the same thing.
 

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What Ghana needs to do is have local contribution in those sectors

We are already doing that in Nigeria, we are changing our Oil sector.

So more of the Oil wealth will stay in Nigeria and more of the local companies and people will be empowered.

We are doing this with a enforceable legislation that must be adhered to by every company in the sector. It is called the "Local content Bill"

Nigeria will get billions of dollars from that bill.


Ghana should do the same thing.
Ghanaians arent as brave business people as Nigerian. Ghanaians like safe things like retail and property. Very few have the balls go into industry unlike in Nigeria.

Speaking off which, whats happen to the long-delayed reform on NNPC? I think Sonangol and Petrobras are good models.
 

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"Bediako put GDP per capita for the current year at $1,318.36 provisionally against an existing estimate of $753."

That's pretty much the same as Nigeria's nominal GDP per capita.

I don't understand though how for both Ghana and Kenya who have low GDP per capita even relative to their continent, have one of the best poverty rates in SSA?? No doubt theirs distortion, you see with pretty much every oil producing country, but I always thought they underestimated both Ghana and Kenya. After going to Nairobi it's hard to see the country have a rather small economy even based on the continent's standards
 

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"Bediako put GDP per capita for the current year at $1,318.36 provisionally against an existing estimate of $753."

That's pretty much the same as Nigeria's nominal GDP per capita.

I don't understand though how for both Ghana and Kenya who have low GDP per capita even relative to their continent, have one of the best poverty rates in SSA?? No doubt theirs distortion, you see with pretty much every oil producing country, but I always thought they underestimated both Ghana and Kenya. After going to Nairobi it's hard to see the country have a rather small economy even based on the continent's standards
Income inequality.
 
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