There are now more frequent rebasing exercises for both GDP and inflation data across the continent. Consequently, the changes, often to the upside are not as dramatic as those of the past. Ivory Coast finally rebased its GDP this year, changing the base year to 2015 from 1996 hitherto. South Africa also plans a GDP rebasing exercise during the course of the year, with the base year to be changed to 2015 from 2010 hitherto and new sector weights adopted.
In the same vein, Kenya and Ghana recently updated their inflation data, using new household surveys to change the consumer price index (CPI) basket of goods and services and adopted more recent base years. But even as these are improvements, they rely on what may still be deemed more than ideally lagged price and consumption data on the one hand and not long enough historical data for the new bases on the other.
Take the Kenyan case; the new CPI, which now has a base period of February 2019, is based on a 2015/16 household budget survey. In the Ghanaian case, the rebased CPI, which now has a base year of 2018 (2012 hitherto), has only the revised historical data from August 2019 readily available on its website (based on author’s checks in early May 2020). As Kenya and Ghana are major African economies, these deficiencies could be said to be representative of a broader phenomenon in this regard across the continent.
In general, a disaggregation of African data is often times not readily available; talk less newly rebased ones. As can be imagined, other planned African rebasing and survey exercises for the remainder of 2020 have been complicated by the ongoing Covid-19 pandemic. Delays in statistical data releases have been announced, with some exercises postponed altogether or methodologies changed to ensure publication within the year. Still, the key point is that the statistics of increasingly more African countries are being refreshed more regularly and businesses and investors could reasonably expect them to provide a good base case glimpse of the current state of the economy of interest.
That said, there is clearly a need to always juxtapose official numbers with other more real-time and down-to-earth data. As earlier shown, censuses, while now relatively more frequent on the continent, are still conducted with significant time lags. There is as yet no certainty about when the next Nigerian census would take place, for instance. And for South Africa, another census has been set for 2021.
In the intervening period between censuses, investors and businesses still need up-to-date and accurate data. In some cases, emerging techniques for using openly available spatial data show promise in bridging the gaps. Mobile phone subscription data are increasingly used to assess consumption patterns across income classes. Data on mobile phone use and spending sometimes provide far better insights into the spending patterns of an African country’s population than do official poverty statistics. In any case, most African statistical agencies now source and publish data from their telecommunication regulators.
Social media data can also be reliable for filtering some official statistics. Considered “the largest enumeration of people in history,” with more than 2.4 billion active users, Facebook data can be used to get a sense of a country’s population, for instance. Whitby (2020) argues Facebook is tantamount to a census because the information it collects are modelled after the United Nations census core guidelines. These include name, birthday, gender, cities of residence and origin, high school and college attended, employer and relationship status. While in the African case, many of the poor in the informal economy might not have Facebook accounts, a firm looking to target the portion of the population with disposable income might find Facebook data to be quite useful.
Firms can also now recreate some of Africa’s economic statistics. Real-time prices for African consumer goods and services are now increasingly available on the internet. While their use has long been in practice by private sector economists in advanced economies, rising growth in African online retailing for both goods and services means it is increasingly similarly easy and cheap to use them for investment decisions on the continent as well. Just recently, The Economist asserted statistical organisations around the world had begun “scraping web pages” too, a practice they once shunned but are now forced to adopt since some of their conventional data collection methods have been rendered redundant by the COVID-19 pandemic.
These are just illustrative examples to show how firms and investors now deploy various creative techniques to overcome the data challenge. Still, these additional efforts on their part to gauge opportunities and make investment decisions on the continent clearly add to the costs of doing business. Add to that the possibility that it could all be in vain if the reality on the ground turns out be way outside of any considered scenarios. Understandably, some firms might choose not to make the effort altogether. Thus, while one acknowledges ongoing improvements in the production and distribution of African statistics in recent years, one chooses to err on the side of caution and advise similarly to its users.
Edited version of article was first published by the NTU-SBF Centre for African Studies of Nanyang Business School, Singapore. References are in the original article.
