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Tanzania – GDP rebasing raises size of economy


Tanzania is now the latest African country to have released rebased GDP figures. The base year was changed from 2001 to 2007, and this resulted in the estimate for GDP increasing from TSh20.95trn for 2007 to TSh26.77trn, or by 27.8%. More detailed information will be provided by the National Bureau of Statistics (NBS) at the official launch of the new series in mid-November. The old and new values of selected sectors are shown in the accompanying graph. The largest increase in absolute terms was witnessed in the agricultural sector.

Statistics released by the NBS also showed that real GDP growth slowed to 6.9% y-o-y in the second quarter of 2014, down from 7.6% y-o-y in the corresponding period of 2013. The agricultural sector expanded by 5.4% y-o-y in the second quarter, up from 4.9% y-o-y in 2013 Q2. Meanwhile, growth of 3% y-o-y was achieved in the mining sector, compared to a contraction of 6.2% y-o-y in the corresponding quarter of last year. While diamond and Tanzanite production increased over the period, there was a slight decline in gold production.

WHY DO WE CARE? In addition to changing the base year, the new series is also based on updated methodology. It is somewhat disconcerting that there was such a big jump in Tanzania’s GDP figures, given that the period between the two base years is relatively small – six years, compared to for example 20 in Nigeria and eight in Kenya. While Tanzania’s new GDP figures are at least bound to be more accurate than the previous series, one cannot help but wonder how wrong the new series will eventually turn out to be, and hence, interpretation of – and calculations based on – these figures should continue to be done with care. This problem is however not unique to Tanzania, with data problems seen across the continent, and elsewhere


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