In turn, Togo has changed the standards for calculating its GDP. The operation, which makes it possible to include informal activities, is not neutral: it further strengthens compliance with the rules of convergence in West Africa.
Togo’s Council of Ministers has approved the “rebasing” of the Gross Domestic Product. This accounting procedure consists of changing the base year of the Nation’s accounts and reviewing the calculation methods. The country migrated from the 1993 System of National Accounts (SNA) to the 2008 SNA.
“Togo, like other countries in Africa, wishes to align its methods of preparing accounts with current international standards and to make its macroeconomic aggregates comparable internationally,” explains the government.
This device, already taken advantage of by several African countries – notably Nigeria – does not only have consequences of pure display. In particular, the procedure places the country concerned with regard to the convergence criteria in its zone of integration, here the WAEMU.
This assessment is attributed mainly to “improved data sources with wide coverage of targets, especially informal activities that were not sufficiently taken into account in the old system,” according to official notes.
The need to achieve migration is explained by the revision of the 1993 SNA, the IMF balance of payments and public finance manuals, as well as that of the international standard classification by industry and the central classification of products, explains the communiqué of the Council of Ministers.
“This is a great day for our country, a great day because we have reached a process that started in 2018,” Sani Yaya, Minister of Economy and Finance, said at a conference. hurry.
The National Institute for Statistics and Economic Studies (Inseed) is the prime contractor. Sani Yaya thanked the IMF, the World Bank, Afritac (IMF Regional Technical Assistance Center for West Africa), Afristat (Economic and Statistical Observatory for Sub-Saharan Africa), and the Commission Economic for Africa (ECA).
A declining debt ratio!
Thanks to this “rebasing”, Togo displays a greater wealth produced. Gross GDP for 2016, under the 2008 SNA, increased to 3,574.4 billion CFA francs (5.45 billion euros) against 2,618.1 billion according to the 1993 SNA, i.e. a revaluation of 36.5% . For the year 2017, the real GDP is 3,729.8 billion FCFA, corresponding to a growth rate of 4.3% between 2016 and 2017. The nominal GDP stands at 3,713.6 billion F. CFA for the same year.
In addition, based on the results of the “rebasing”, nominal GDP stood at 3,951.4 billion CFA francs in 2018 and 4,230.6 billion in 2019 (6.45 billion euros). , according to the 2008 SNA against respectively 2,979.6 billion FCFA and 3,216.8 billion FCFA according to the 1993 SNA. The updated GDP forecasts for the year 2020 amount to 4,399.9 against 3,322.3 according to the SCN 1993.
The reassessment of nominal GDP has had a significant impact on the results obtained. They show that all the first rank convergence criteria are met. Indeed, the criteria of the debt ratio and the budget balance (including grants) to GDP have improved.
Thus, the debt ratio (debt to GDP) now stands at 51.9% in 2019 against 68.3% in the old accounting system. On this basis, the revised forecasts for 2020 show a debt ratio of 51.8% against 68.6%.
Likewise, the tax pressure rate fell from 20.8% to 13.6% in 2019, with regard to the new standard. According to projections, this rate should increase slightly this year, to 14.6% in 2020 for a standard of 20.0% at least.
However, the 1993 SNA showed a rate of 20.8%. However, the government of Togo promises, efforts will have to be continued to reduce the tax burden again, thanks to new reforms aimed at improving the business climate and the attractiveness of the country. Other so-called “second-rate” convergence criteria must also be met.
Better international appreciation?
“There is nothing fanciful about the figures produced, as they have been validated by the IMF and other institutions. This shows the seriousness of the work presented today,” said Planning Minister Demba Tignokpa. Which explained that accounting methods have changed and that Togo could not remain on the sidelines of this development. For Sani Yaya, the importance of “rebasing” lies in the criteria for evaluating the Togolese economy by partners and investors. “These criteria have improved and will improve further.”
We remember that in 2014 Nigeria overhauled its accounting, suddenly becoming Africa’s largest economy. Other countries like Benin, Burkina Faso, Guinea-Bissau, Niger, Senegal, have followed the trend.
The difficulty of the exercise lies in taking into account as accurately as possible “informal” activities, therefore not subject to (statistical) control by the State. Africa does not have a monopoly on these “rebasings”. For example, Great Britain has included, in recent years, illicit activities (drugs, prostitution …) in the estimate of its GDP …
Reference: https://www.togofirst.com/fr/gouvernance-economique/2309-6289-togo-les-retombees-du-rebasage-du-pib
