Kigali, 05 December 2014 (ECA): The Government of Uganda released last week, updated figures that raised the country's GDP by 13.1 percent from 63,905 billion shillings ($24.7bn) to 68,407 billion shilling ($26.9bn) for the fiscal year 2013/14. The re-calculation was a result of changes to the base year, from 2002 to 2009/10. The new figures are to be welcomed because they provide the basis for more accurate economic indicators that are essential for evidence-based policy making. The revision has significantly improved coverage of economic activities in the economy, especially for the informal sector and non-profit institutions.
The revisions also have significant implications for the market size of the East African Community (EAC). Three out of the five EAC member states (Kenya, Tanzania and now Uganda) have recently announced revised GDP estimates. In September the rebasing of the Kenyan economy - the largest in Eastern Africa - resulted in a 25.3percent increase of its GDP, and Tanzania has just released a preliminary estimate of its rebased GDP for 2007 of 27.8 percent. Together with the Ugandan rebasing, this would imply that the overall size of East African market is now substantially larger than hitherto believed - by a margin of approximately a fifth.
Revised GDP Estimates for EAC Countries, post-Ugandan Rebasing
Old GDP, 2013 (USD, Billions)
Revised GDP,2013 (USD, Billions)
Change after rebasing %
Source: UNECA and EAC Secretariat
Notes:: *Tanzania figure a UNECA estimate based on the 2007 rebasing -
Uganda** figures are for the fiscal year 2013/2014
The EAC Secretariat is currently citing a regional GDP of US110.3 billion dollars for 2013, but these rebased GDP figures for Kenya, Tanzania and Uganda now places the combined GDP of the five EAC members at approximately USD 134.9 billion USD. In the light of the new figures, the regional market is a much more attractive proposition for both domestic and foreign investors.
With specific regard to implications of the revised Ugandan GDP statistics on the structure of the economy, the national accounts are now classified according to the International Standard Industry Classification (ISIC) Revision 4 compared to ISIC Revision 3 for the 2002 base series. There have been a number of notable shifts under the new ISIC Revision 4 Classification. Using the comparable figures for 2012/3 under the two different base years (2002 vis-a-vis 2009/10), industries contribution declined quite sharply, from 26.6 percent to 20.8 percent - mainly due to the revaluation of the contribution of construction. Conversely, manufacturing - a sub-component of Industry - rose from 8.0 percent to 10.0 percent. Agriculture and services increased marginally.
A second notable feature arising from the Ugandan rebasing exercise is that, although GDP per capita has risen from $697 in 2013/14 (under the 2002 base year) to $788 (under the new 2009/10 base year), this does not imply either better living standards of the population or a decrease in the poverty rate. The new figures will also change the values of macroeconomic aggregates where GDP is used as a denominator. Thus, for instance, it is likely to underscore the inadequate level of government revenues. The ratio of tax revenues to GDP will decrease as a result of the changes to GDP. In 2012 this ratio was at 13% of GDP - already a low figure by international and African standards.
Written by Andrew Mold and Rodgers Mukwaya,
Staff of Sub-Regional Data Centre at the ECA Office for Eastern Africa