Download GDP Per Capita

Industrial and Investment Development:
Do statistics matter to Africa and
Africans?
PJ Lehohla
Statistician-General
24 October 2008
1
Issues addressed
•
The nature and posture of statistics in state
administration
•
Post-colonial Africa and its political forms
•
Economic performance and statistics in Africa
•
Political strife and statistics in Africa
•
Post 1995 economy and statistical development in Africa
•
Crisis in financial markets and collapse of economies
•
International comparisons programme: Can industry and
investment benefit from it?
2
Crisis in financial markets and collapse
of economies 1929, 1980’s, 1997, 2008
• Do Africans know anything about these?
• Can Africans do anything about it?
• Do these have an impact on Africans?
• Are Africans capable of measuring the
impact of these?
• What is Africa’s and African industrial and
investment strategy in dealing with the past
and current crisis and for certain future
ones?
3
Environment for statistical practice
Emerging gaps
Core
Competency
Collection
Processing
Reputation
Intellectual
Technological
Logistics
Political
Administrativ
e
14
4
Your reference
Nature and posture of statistics in state
administrations up to recent past
•
•
•
•
•
•
•
•
•
Policy in Africa is driven by impulse and not evidence
Statistics law do not exist or are outdated in Africa
Statistics are of service to the ministry and not state
Statistics poorly funded
At best known as a census office
Dependent on aid
Skewed priorities
Staff capacity very poor
Political profile non-existent
5
Building statistical infrastructure in postcolonial Africa
•
•
•
•
Establishment of a statistics office
Establishment of training institutions
Developing a work programme
Economic Commission for Africa and its role
6
Post-colonial Africa and its political forms
• Influenced by bipolar world of West and East
• Embroiled in military coups and counter coups
• for example
– Ghana Nigeria in 60’s
– Uganda Liberia 70’s
– Lesotho Somalia Ethiopia 80’s
• Onset of democracy post collapse of Berlin wall
• Unipolar world
• Resource rich economies and rapid economic growth
7
Economic performance and statistics in Africa
•
Poor economic performance
•
Debt
•
Structural adjustment prescriptions
•
Destruction of health and education infrastructure
•
Low investment
•
High unemloyment
•
No statistics
8
Post 1995 statistical development in Africa
•
•
•
•
•
•
•
•
Birth of democracy
Broad based initiatives
PARIS21 comes on the scene 1998
Catalytic role of censuses for democracy in post 1995 Africa
Mozambique and international funding agencies 1997
International Comparisons Programme Africa (ICP Africa) and
Purchasing Power Parities (PPPs) 2005
The General Data Dissemination Standards (GDDS) and the Special
Data Dissemination Standards (GDDS and SDDS) 1999
The making of the Africa Symposia for Statistical Development
(ASSD) 2006
• Better Growth 6%
• The Current Financial Crisis. Can Africa
handle it?
9
The future
•
•
•
•
•
•
•
•
•
With democracy there is better prospect for statistical
development in Africa
Statistics in Africa are better positioned to date
Paris Declaration for aid effectiveness sets the tone for
statistical development
All African countries are to run a census with the
exception of Somalia
The adoption of evidence linked Poverty Reduction
Strategies
The adoption of GDDS and SDDS have helped states to
see the value of statistics
Strong leadership from countries have raised hope
Politcal support
International comparison Programme
10
What is the International
Comparison Programme (ICP)?
 The ICP is a programme that seeks
to produce national/country and or
regional output net of exchange rate
effects. It uses purchasing power
parity (PPP).
11
ICP 2005
What are PPPs?

Purchasing Power Parities (PPPs) convert values in
local currency prices to “real” values in a common
currency.

They are based on multilateral comparisons of prices
between countries.

They permit the comparisons of real levels of output or
income between countries, just as price deflators or a
consumer price index allow real comparisons over
time.
12
The ICP Governance
ICP under auspices
of the UN Statistical
Commission
ICP Executive Board
Global Office
World Bank
Technical Advisory
Group
Africa
Asia
CIS
LAC
West Asia
(48 countries)
(23 countries)
(10 countries)
(10 countries)
(11 countries)
Note: Egypt and Russia participated in two regional comparisons.
13
Eurostat/
OECD
(46 countries)
Who are some of the key users of
ICP?
 Global Development economists and media analysts (poverty
analysis, understanding development strategies, investment
analysis)
 International organisations (IMF, World Bank, EU)
 International and national donors (analyzing policy
effectiveness, funds allocations)
 National Policy makers (investment policy, fiscal policy)
 Central Banks (monetary policy to the extent that CBs can
influence exchange rates)
 Businesses (use of comparative price levels to assess
business opportunities, setting compensation)
14
Compare PPP GDP with
volume measures –other
• Carbon emissions per unit of GDP
economic variables
• Energy use per unit of GDP
• GDP per number of workers
• GDP per hour worked
• PPP measures of financial Aid
• PPP measures of remittances
• Per capita comparisons for
health, education
15
Applications of PPPs
 System of National Accounts calls for real comparisons
between countries to be done using PPPs



UNDP includes GNI measured at PPP in the Human
Development Index.
World Bank uses PPPs to establish international
poverty lines—1 $ per day poverty line
IMF measures size of economy and aggregate
growth rates in PPP terms
 EU allocates Structural Funds to member states
16
Other Applications of PPPs—national level



PPPs differ from sector to sector allowing
price levels for components of GDP to be
compared across countries
Use comparative ratios of consumption
goods vs investment to GDP and
relationship with economic growth
Evaluate living standards using PPP per
capita expenditures for food, clothing,
housing, etc.
 Identify areas of competitive
advantage
17
Historical Global ICP
Participation
Number of countries participating
146
2005 ICP requirements for participation
Each country must provide:
1. National annual average prices for a set of well defined goods and services; and
2. Estimates of its GDP compiled in line with the framework described in SNA93
18
Economies in the ICP 2005
East Asia and Pacific
Australia
Brunei Darussalam
Cambodia
China
Fiji
Hong Kong, China
Indonesia
Japan
Korea, Rep.
Lao PDR
Macao, China
Malaysia
Mongolia
New Zealand
Philippines
Singapore
Taiwan, China
Thailand
Vietnam
American Samoa
French Polynesia
Guam
Kiribati
Korea, Dem. Rep.
Marshall Islands
Micronesia, Fed. Sts.
Myanmar
New Caledonia
Northern Mariana Islands
Palau
Papua New Guinea
Samoa
Solomon Islands
Timor-Leste
Tonga
Vanuatu
South Asia
Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka
Afghanistan
Sub-Saharan Africa
Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Cape Verde
Central African Republic
Chad
Comoros
Congo, Dem. Rep.
Congo, Rep.
Cote d'Ivoire
Equatorial Guinea
Ethiopia
Gabon
Gambia, The
Ghana
Guinea
Guinea-Bissau
Kenya
Lesotho
Liberia
Madagascar
Malawi
Mali
Mauritania
Mauritius
Mozambique
Namibia
Niger
Nigeria
Rwanda
Sao Tome and Principe
Senegal
Seychelles
Sierra Leone
South Africa
Sudan
Swaziland
Tanzania
Togo
Uganda
Zambia
Zimbabwe
Eritrea
Mayotte
Somalia
Europe and Central Asia
Albania
Armenia
Austria
Azerbaijan
Belarus
Belgium
Bosnia and Herzegovina
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Georgia
Germany
Greece
Hungary
Iceland
Ireland
Italy
Kazakhstan
Kyrgyz Republic
Latvia
Lithuania
Luxembourg
Macedonia, FYR
Moldova
Netherlands
Norway
Poland
Portugal
Romania
Russian Federation
Serbia and Montenegro
Slovak Republic
Slovenia
Spain
Sweden
Switzerland
Tajikistan
Turkey
Turkmenistan
Ukraine
United Kingdom
Andorra
Channel Islands
Faeroe Islands
Greenland
Isle of Man
Liechtenstein
Monaco
San Marino
Uzbekistan
19
Latin America & Carribeans
Argentina
Bolivia
Brazil
Chile
Colombia
Ecuador
Mexico
Paraguay
Peru
Uruguay
Venezuela, RB
Antigua and Barbuda
Aruba
Bahamas, The
Barbados
Belize
Cayman Islands
Costa Rica
Cuba
Dominica
Dominican Republic
El Salvador
Grenada
Guatemala
Guyana
Haiti
Honduras
Jamaica
Netherlands Antilles
Nicaragua
Panama
Puerto Rico
St. Kitts and Nevis
St. Lucia
St. Vincent & Grenadines
Suriname
Trinidad and Tobago
Virgin Islands (U.S.)
North America
Canada
United States
Bermuda
Middle East & North Africa
Bahrain
Djibouti
Egypt, Arab Rep.
Iraq
Iran, Islamic Rep.
Israel
Jordan
Kuwait
Lebanon
Malta
Morocco
Oman
Qatar
Saudi Arabia
Syrian Arab Republic
Tunisia
Yemen, Rep.
Algeria
Libya
United Arab Emirates
West Bank and Gaza
Legend
Countries Participating in ICP
Countries NOT Participating in ICP
Summary
No. Countries Participating in ICP 147
Total No. Countries in the World
209
Regional Results - By Stages
Each region worked in parallel with Economies
National
Accounts
Prices
1.
2.
3.
4.
5.
Prepare
specification for
products to be
priced
Determine survey
framework
Collect prices
Data validation
Compute PPPs
within region
1. Ensure consistency
with SNA 93
2. Allocate expenditures
on GDP to the 155
ICP basic headings
To produce
regional results
20
Diversity of regions required different
methods
Africa
Five regions
(plus Eurostat-OECD)
Asia
CIS
Have different:
South America
• Economies (size, structure)
• Statistical capacity
Western Asia
Eurostat-OECD
• Methodologies
21
A snapshot of the world in 2005
Purchasing Power Parities

Size of the world

Economic well being

Relative living costs
22
New view of world economy
World Share of GDP
World Share GDP
Based on Market Exchange Rates
Based on PPP
Low-income
economies, 7%
Low-income
economies, 2%
Middle-income
economies, 19%
Middle-income
economies, 32%
High-income
economies, 78%
High-income
economies, 61%
23
The size of the world
economy
ICP 2005
GDP @PPP
Previous
GDP
@PPP
GDP
@ Market
exchange
rates
World---146
countries
54,975
59,712
44,306
High income: OECD
31,422
31,726
33,342
964
1,264
486
10,971
16,367
4,221
CIS
2,269
2,171
970
South America*
2,698
2,911
1,411
* Excludes
exporting countries.
West
Asia
1,158
932
588
GDP 2005 ($
billions)
Africa*
Asia and Pacific*
Note: Regional totals do not include all ICP participants.
24
Reasons new PPPs differ from
previous data in the WDI
• More countries included in the 2005 ICP Round
•
•
•
•
•
– China first time — India first time since 1985
– More African countries.
New methodology for housing, government, linking
regions
Data quality improved due to better statistical capacity
of countries.
Products priced differed from 1993 to 2005 ICP
Rounds.
System of National Account (SNA) changed from SNA
68 to SNA 93 in many countries.
Previously extrapolated data were at GDP level, while
new PPPs are computed at individual product/basic
heading level.
25
People and their spending
70
60
50
World Population (%)
40
30
20
World PPP GDP (%)
10
0
Low
Middle
High
26
The largest dozen
 Twelve economies account for two-thirds of world
expenditures.
 The five largest are US, China, Japan, Germany,
and India.
 Seven are high income economies: US, Japan,
Germany, the UK, France, Italy, and Spain.
 And five are low- or middle-income economies:
China, India, Russia, Brazil, and Mexico.
27
Economic well being –
PPP consumption per capita
PPP- Based Actual Individual Consumption per capita, $
30,000
25,000
20,000
15,000
10,000
5,000
0
Eurostat/OECD
CIS
South America
28
Western Asia
Asia/Pacific
Africa
GDP and its main components by regions
GDP, AIC, GG, GFCF (per capita, PPP-based, world=100%)
350%
300%
250%
200%
150%
100%
50%
0%
Africa
Asia/Pacific
CIS
OECD-Eurostat
GDP per capita
General Government per capita
South America
Actual Individual Consumption
Gross Fixed Capital Formation
29
West Asia
Comparing price levels
 Price level indexes are the ratio of an
economy’s PPP to its exchange rate with
another economy
 Measure cost of living or cost of doing
business
 Or simply the most expensive or
cheapest places to travel
30
Prices higher in rich
countries
200
Iceland
Denmark
Switzerland
Norway
Price level index (World=100)
180
160
Japan
140
United States
120
Fiji
100
80
Brazil
60
Congo, D.R.
China
40
India
20
Bolivia
0
GDP per capita
31
Price level index, GDP components by regions
Price Level Index, World=100%
160%
140%
120%
100%
80%
60%
40%
20%
0%
Africa
GDP
Asia/Pacific
Actual Individual Consumption
CIS
OECD-Eurostat
General Government
32
South America
West Asia
Gross Fixed Capital Formation
Introduction
ICP-Africa:
• Undertaken in 48 African countries
• Capacity building dimension in addition to main
outputs
• Implementation of the program in a collaborative
mode involving a broad range of partners
• Integration of ICP into the usual activities of African
NSOs: publication of PPPs yearly from 2006 up to the
next round in 2011
33
34
ICP Africa 2005
Household Final Expenditure: Price level and
expenditure share: Africans live to eat
C h ar t 3. : P r ic e L e ve l In d ic e s : T h e T e n Hig h e s t
an d T e n L o w e s t
Chart 4. Africa Real Expenditure Shares (%)
Food & Non-Alcoholic
Beverages
43.9
Eq. G uinea
Transport
Furnishings, Household
Equipment & Routine Household
Namibia
C omoros
Clothing and Footw ear
10.9
7.1
7.0
S outh A fric a
Housing, Water, Electricity, Gas
& Other Fuels
S ão T. & Princ ipe
Health
4.9
Tanz ania
Miscellaneous Goods &
Services including Net
4.6
G ambia
Alcoholic Beverages, Tobacco
& Narcotics
6.0
4.0
Restaurants & Hotels
3.3
Recreation & Culture
3.3
B urundi
Madagas c ar
Education
2.8
Ethiopia
Communication
0.0
0.5
1.0
1.5
2.0
35
2.2
Real GDP Shares (Africa = 100%)
21%
36
Ranking by Nominal and Real Per Capita
Income Levels
South Africa
Nominal
5 Top Ranked Countries
5 Top Ranked Countries
Mauritius
South Africa
Botswana
Gabon
Equatorial Guinea
Mauritius
Equatorial Guinea
Botswana
Gabon
37
Real
Ranking by Nominal and Real Per Capita
Income Levels
Burundi
Ethiopia
Liberia
Congo, Democratic Republic
Nominal
5 Lowest Ranked Countries
5 Lowest Ranked Countries
Congo, Democratic Republic
Liberia
Burundi
Zimbabwe
Guinea-Bissau
Gambia, The
38
Real
Real Individual Consumption Expenditure
Shares (Africa = 100%)
Sudan
5%
Nigeria
13%
Other countries
41%
Egypt
20%
South Africa
21%
39
Real Investment Expenditure Shares (Africa = 100%)
Nigeria
9%
Morocco
10%
Other countries
44%
Egypt
14%
South Africa
23%
40
Price Level Indices for Selected African
Countries (At GDP Level)
Price Level Indices: The five Lowest
Price Level Indices: The five Highest
Zimbabwe
Madagascar
Cape Verde
Burundi
Namibia
Egypt
South Africa
Gambia
Comoros
Ethiopia
0
0.5
1
1.5
2
0
2.5
41
0.2
0.4
0.6
0.8
Price Level Indices for Investment
Expenditure in Selected
Price Level Indices: The five Highest
Price Level Indices: The five Lowest
Cote d'Ivoire
Burundi
Congo
DRC
Equatorial Guinea
Egypt
Lesotho
Ethiopia
Zimbabwe
Malawi
0
0.5
1
1.5
2
2.5
0
42
0.2
0.4
0.6
0.8
Per Capita Actual Household Consumption in
Selected
Actual Per Capita HH consumption: The five Highest
Actual HH Per Capita consumption: The five Lowest
Mauritius
Guinea-Bissau
South Africa
Zimbabwe
Tunisia
Burundi
Egypt
Liberia
Gabon
DRC
0
1000
2000
3000
4000
0
43
50
100
150
200
250
ICP 2005
And the poorest economies
GDP per capita
Consumption per capita
 Congo Dem Rep
 Congo Dem Rep
 Liberia
 Liberia
 Zimbabwe
 Zimbabwe
 Guinea Bissau
 Guinea Bissau
 Ethopia
 Ethopia
44
ICP 2005
Average PPP consumption across all
PPP consumption per capita (US$)
35,000
20,000
5,000
30,000
25,000
20,000
World
Average
6,096
15,000
10,000
5,000
0
45
1,000
0
DRC
Burundi
Liberia
Ethiopia
Guinea-Bissau
Niger
Malawi
Gambia
Central african republic
Zimbabwe
Sierra Leone
Mozambique
Rwanda
Guinea
Uganda
Togo
Madagascar
Mali
Burkina Faso
Lesotho
Ghana
Comoros
Tanzania
Kenya
Zambia
Benin
Mauritania
Cote d'Ivoire
Chad
Nigeria
Senegal
Djibouti
Cameroon
Sudan
São T. & Principe
Congo
Angola
Cape Verde
Morocco
Namibia
Swaziland
Egypt
Tunisia
South Africa
Mauritius
Gabon
Equatorial Guinea
Botswana
ICP Africa 2005
GDP Per Capita (in “Afric”/PPP)
6000
5000
4000
3000
2000
1000
46
ICP Africa 2005
Nominal Vs Real Measures – GDP per capita
7000
6000
5000
Nominal ($ US )
4000
R eal (AF R IC )
3000
2000
1000
47
E quatorial
G uinea
G abon
S outh A fric a
Namibia
Djibouti
C omoros
Madagas c ar
Uganda
R wanda
G ambia
E thiopia
0
ICP Africa 2005
African GDP vs Price levels
GDP Price Level Indexes, World = 100
100%
Cape Verde
Zimbabwe
(180%)
90%
Namibia
80%
South Africa
70%
60%
50%
40%
Burundi
The Gambia
30%
Ethiopia
20%
GDP per capita
48
th
S
ou
ah
ar
an
A
fri
ca
E
qu
A
fri
ca
S
w
at azi
la
or
n
ia
lG d
ui
C
ne
ap
a
e
S
V
ão
er
d
To
m
Le e
é
an sot
ho
d
P
rin
ci
pe
N
ig
er
ia
K
en
C
ôt
ya
e
d'
Iv
C
on oir
go e
,R
ep
.
C
ha
d
C
om
B
o
ur
ro
ki
na s
Fa
Ta s o
nz
an
ia
C
en
M
tra
al
lA
i
A
fr i
ca n g
ol
n
a
R
ep
G
ub
am
lic
bi
a,
Th
e
M
al
aw
i
N
ig
Zi
er
m
ba
bw
e
Li
be
ria
-S
S
ub
ICP Africa 2005
Gross fixed capital formation
Gross Fixed Capital Formation
140.0%
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
49
Questions
?
50