Deogratius Kilawe
C.E.O - Mikono Speakers Worldwide
On June 16th
I was at Julius Nyerere International Airport getting ready to board a
flight to Nairobi for the Kenya edition of the High Performance
Leadership seminar with Azim Jamal and Brian Tracy. While at the
airport, I was pleasantly surprised to meet my university professor from
my undergraduate days at Mzumbe University who was boarding the same
flight. We sat down over a cup of coffee and he praised me for my work
and acknowledged that the university is very proud to have produced such
a person as me. Just to hear him speak so highly of me really motivated
me to continue what I am doing and keep pushing for change in the
world.
The
main topic of discuss with the Professor was the current rebasing of
Gross Domestic Product (GDP) of some African countries, most prominent
being Nigeria, and similar initiatives in Kenya and South Africa.The
United Nations defines rebasing as the "process of replacing present
price structure (base year) to compile volume measures of GDP with a new
or more recent base year." Rebasing is theoretically a means of
allowing the computation of more accurate GDP figures and thus provide a
more realistic picture of the economic landscape in a country. After
rebasing, Nigeria has now overtaken South Africa as the continent's
biggest economy with GDP now worth $510bn (2013 figures).
So
what has Nigeria done during its rebasing exercise? The rebased GDP
figures now include the informal sector and show a much greater
contribution of services sector. E-commerce, telecommunications and its
prolific "Nollywood" film industry are now some of the most important
sectors in the Nigerian economy. Nollywood generates nearly $600 million
a year and employs more than a million people, making it the country's
second-largest employer after agriculture. The number of industries
covered in GDP computation has increased from 33 to 46 while greater
weighting has been allocated to sectors such as
telecommunications.Nigeria and South Africa have the two largest mobile
phone markets in Africa[there are now some 120 million mobile-phone
subscribers in Nigeria, out of a population of 170 million. Under the
new set of data, the oil and gas sector, by far the biggest
source of government revenue, contributed 14 percent of GDP compared
with 32 percent under the old GDP computations.
Nigeria
and South Africa are the largest mobile markets in sub-Saharan Africa,
and cell-phone use has been exploding in the country
Why
are African countries such as Nigeria rebasing of their GDP now? One
reason could be that it is a new marketing strategy. To be named as
biggest economy in Africa undoubtedly creates its own hype and can
significantly improve an economy's prospects in attracting foreign
investment.
"One
estimate suggests that for twenty years sub-Saharan African economies
have been growing three times faster than suggested by the 'official'
data."
When
Ghana rebased in 2010, its GDP increased by 60 percent, transforming it
instantly from a "low-income" country into a "lower-middle-income"
country.
Closer
to home in East Africa, currently Kenya is rebasing its economy so as
to maintain its position as the biggest economy in East Africa.
The rebasing exercise, which shifts the base year from 2001 to 2009, is
expected to show an expansion of the economy by 20.6%. economist they
urge Nigeria techniques does not reflect reality,
Despite
the changes in GDP computation, Nigeria has per capita income of $3,000
which is low – and well below South Africa's at $7,336. Nigerians
continue to struggle with poverty, inequality and electricity shortages.
What is the current status in East Africa? Kenya
has GDP of $45 billion; Tanzania has $34 billion GDP, Uganda has $23
billion GDP, Rwanda $7 billion GDP and Burundi is $2.4 billion GDP. Due
to oil and gas discoveries in Uganda and Tanzania,their respective GDPs
are expected to significantly increase in the coming years. In the case
of Tanzania, the economy is expected to become the 3rd biggest economy in Africa by 2035 if key obstacles are going to be resolved.
During my discussion with Professor two issues arose and I would like to share them with you:
- Data might show a country's GDP growing rapidly but the majority of its people are poor. It may be that the GDP is being generated and controlled by very wealthy while rest remain poor and powerless. In a recent interview, Dr Yemi Kale, Statician General of the National Bureau of Statistics of Nigeria said: "While it [GDP] depicts how rich a nation is, this is not necessarily the same as showing how rich the individuals in the nation are, due to the problem of unequal distribution of wealth. Similarly, growth in GDP is not synonymous with job creation.
- If the rest of Africa adopts the same techniques Africa is going to be rich in term of figure not real life.
Nigeria vs South Africa
Nigeria's
takes the title of Africa's biggest economy will fuel a longstanding
rivalry with South Africa. South Africa currently represents Africa at
the G20, as well as in the "BRICS" group of the most powerful emerging
economies, which also includes Brazil, Russia, India and China. Nigeria
may argue that it should join those clubs too.
Just
the other day while I was reviewing a report on the Ease of Doing
Business criteria, I discovered that some of the measures to encourage
investment and reduce red tape are very simple. Singapore has been
ranked number one due to fact that they have been doing well and scoring
good marks in the following areas: Starting A Business, Dealing with
Construction Permits, Getting Electricity, Registering Property, Getting
Credit, Protecting Investors, Paying Taxes, Trading Across Borders,
Enforcing Contracts and Resolving Insolvency.
Back
to Tanzania, why has it not been easy to solve the above mention issues
quickly? Our nation, like any other nation, is complex machine.
However, we can rapidly develop if we succeed in creating and
enterprising, business-minded economy. Such an entrepreneurial society
will increase efficiency and vastly increase economic growth and
development as has been the case in countries such as Singapore,
Malaysia and South Korea. As the country develops more rapidly it will
also develop politically and exhibit greater democracy and good
governance. This will in turn create greater alignment between business
and politics as they seek to promote mutual interests, which should mean
Tanzanians having an even greater say in their local politics, hence
greater development. With all the benefits it can bring, it is
imperative to create an enterprising, business-minded society
as soon as possible.
I look forward to get feedback from you soon as possible.
Always your fan,
Deogratius Kilawe
C.E.O - Mikono Speakers Worldwide
0717109362
IT PLAZA 1st Floor
Ohio Street, Dar es Salaam, Tanzania.
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