Accuracy of Statistics Botswana data queried

Brian Benza
Staff Writer | Sunday May 12, 2013 00:00

 

In a 2012 fourth quarter economic review report, Jefferis says that forecasting economic growth in Botswana is becoming increasingly difficult because of the divide between reported GDP growth figures and other indicators and sentiment on economic activity.

Jefferis says the 2012 third quarter economic data released by the statistics agency early this year shows a different picture from what is happening on the ground casting doubts on the accuracy of such data.

 “The latest economic growth figures for period to September 2012 show that the non-mining private sector is reported to show continued strong growth of 10.5 percent over the period. Whether this is really the case is doubtful – growth of over 10 percent represents boom conditions and this is not supported by perceptions of business or other indicators of activity.

Given the otherwise weak conditions in the economy, with government spending restraint and declining real incomes for public sector employees, such rapid reported growth is unlikely. We remain of the view that the quality of some of the underlying data used in the GDP calculations by Statistics Botswana is doubtful,” the economist says.

He believes one of the problems that has led to data inaccuracies is that response rates by businesses to requests for data by Statistics Botswana is low, and this makes the reported data less than fully representative.

At a sectoral level, Jefferis says that the water and electricity and construction sectors are reported as being the fastest growing in the economy, with both recording growth of 18 percent over the year to September. The growth rate, he states, seems to be over-stated with the construction sector growth rate looking to be something of a statistical quirk, while the construction figures are believed to be inaccurate and overstated. Jefferis, a former Bank of Botswana deputy governor, says growth in 2013 is expected to be around 4-5 percent, although ‘how this will relate to the growth that is reported in due course by Statistics Botswana is anyone’s guess’.

Last year, Statistics Botswana revised the size and growth rates of the economy for previous financial periods citing anomalies in data collection and calculations, which had resulted in over-estimations of mining and electricity sectors in previous calculations. Following the data revision and rebasing last September, which cut the country’s nominal GDP in 2011 from P119 billion to P109 billion, government also questioned the accuracy of the new figures.

In October, secretary for economic and financial policy, Taufila Nyamadzabo told Mmegi Business that government needed to be convinced that Statistics Botswana’s downward revision of the size of Botswana’s economy and its growth rate is technically and logically sound.

“The lower GDP figures are something that we still need to confirm, whether there is any logical reasoning for the change in the methodology. We still need to be convinced that the right method was used and the revisions make technical and logical sense,” explained Nyamadzabo.