What are the impacts of the change in the base year for the Togolese GDP?

Economic governance
Monday, 28 September 2020 03:27
What are the impacts of the change in the base year for the Togolese GDP?

(Togo First) - Togo has changed the base year for its GDP, following the new accounting methods of major international institutions. The country, like many others in Africa, has migrated from the System of National Accounts 1993 (1993 SNA) to the System of National Accounts 2008 (2008 SNA). 

The change steered by the national institute for statistics, economic and demographic studies (INSEED) has impacted not only the evaluation of the GDP but also key factors such as debt and fiscal pressure. 

Improvements in GDP 

Using the former SNA, Togo’s GDP in 2019 was estimated at CFA3,216.8 billion while it is now estimated at CFA4,230.6 billion with the 2008 SNA. Also, updated projections for 2020 - based on the new system - stand at CFA4,399.9 billion. 

According to official notes, the increase is mainly due to “better data sources, with broader coverage of targets, especially informal activities which were not sufficiently taken into consideration in the old system (1993 SNA).”

Togolese GDP

All convergence criteria are still met

The revaluation of the nominal GDP has significantly affected the country’s results.

As a result, Togo, which already met all primary WAEMU convergence criteria, now records an improvement in the debt ratio and fiscal balance (grants included) relative to GDP. 

In detail, the debt ratio (debt to GDP) changed from 68.3% to 51.9% in 2019. In 2020, this ratio is forecast at 51.8%, still far below the 70% standard.  

Fiscal pressure

Contrary to GDP figures which have improved, the fiscal pressure rate (for 2019) has deteriorated - from 16.3%, in the former accounts system, to 20.8% in the new system. New forecasts for 2020 put the figure at 14.6% (against 21.1% in the 1993 SNA). 

The change in the base year for the GDP was discussed on September 22, 2020, during a council of ministers. 

Ayi Renaud Dossavi

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