Rebasing National Statistics in Zambia
Challenge
Zambia’s statistics were considered inadequate for the IMF to be able to provide an accurate assessment of the macroeconomic and financial situation in the country. National accounts were largely compiled using a heavily outdated benchmark (the 1994 economic census) and inadequate methodology from 1968. This provided an incomplete picture of the economy, especially considering two decades of economic growth and structural change in the country.
Approach
To bring Zambia’s national accounts up to international standards, the IMF and Zambian statistical authority began designing and implementing a thorough rebasing exercise from 1994 to 2010, including the adoption of the 2008 System of National accounts (SNA). This also included expanded coverage of the estimates to include previously omitted activities. Released in March 2014, the resultant (2010) benchmark were about 25 percent higher than before.
Impact
The exercise revealed much about Zambia’s economy that was not previously known. The magnitude of the change in GDP forced policymakers and other stakeholders to revisit the fundamentals of their assessments of the country’s economy, such as debt sustainability, money demand and the inclusiveness of economic growth.
At the same time, the success of the exercise rippled through the region, providing a stimulus for the statistical authorities across Africa to produce adequate economic statistics and national accounts data. Zambia transitioned from being a case study in statistical shortcomings (see Morten Jerven’s book “Poor Numbers”) to a study in statistical best practices. With better statistics providing more clarity on Zambia’s economy, policy makers and potential investors alike have more of the key decision-making data that they need.