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Is Spain’s GDP larger than Africa’s combined?

This article is more than 6 years old

The combined gross domestic product of Africa is less than that of Spain, renowned Kenyan scholar Prof PLO Lumumba said in a keynote lecture.

A prominent speaker on governance in Africa, Lumumba appeared at the annual commemoration of the legacy of Nigerian music legend and activist Fela Kuti in Lagos on 9 October 2017.

A reader who attended the lecture asked us to verify this claim.

Lumumba confirmed to Africa Check that he had made it, putting the GDP of Spain at US$1.8 trillion. He hadn’t counted Morocco, Tunisia, Algeria and Egypt, he noted.

Further, the “true GDP” of African countries without rebasing is smaller, he added, posing: “Remember, who knows the real GDP of the following: Zimbabwe, South Sudan, Somalia, Eritrea, Mali and Mauritania?”

Does one European country annually produce more goods and services than 50 African countries? (Note: When we checked a similar claim by Barack Obama, who referred to France instead; we found the former US president was mostly correct).

How are national GDPs compared?

When comparing the GDP of countries, the usual practice is to value GDP at current market prices, according to the US Bureau of Economic Analysis - with the US dollar used to help compare.

Market rates have their shortcomings, including not capturing differences in the cost of living, experts have previously told Africa Check. For example, the bus fare in Madrid for the same distance would be different from that in N’Djamena, Chad.

The World Bank-coordinated International Comparison Programme works to bridge such differences using an indicator known as Purchasing Power Parity (PPP), but even this has its weaknesses. As such, experts say market price GDP is better at comparing sheer economic strengths and sizes.

Taking market price GDP, World Bank data and that of Spain’s statistics agency put the country’s GDP in 2016 at US$1.2 trillion, significantly lower than Lumumba’s estimate of US$1.8 trillion. (Note: The Organisation for Economic Co-operation Development estimated it at US$1.7 trillion - still lower than his estimate but much closer - in 2016. We have contacted them for comment.)

Calculating the combined GDP of sub-Saharan African economies is less straightforward.

For one, not everything is captured. To harmonise GDP standards and aid comparisons, the United Nations recommends following the System of National Accounts. The most recent version is from 2008, but currently only seven African countries report economic data compliant with it, while 11 are still using the second version of 1968.

Not about ‘statistical exactitude’

For another, data for African economies is not always current. But using World Bank data, the combined 2016 GDP of 46 sub-Saharan African countries (excluding South Sudan and Eritrea) was US$1.5 trillion.

Lumumba’s claim that the combined GDP of Africa is less than that of Spain would thus appear to be inaccurate, even if we exclude the GDP of Morocco, Tunisia, Algeria and Egypt. (Note: This would take the combined GDP to US$2.14 trillion.)

Lumumba held that his context was not about “statistical exactitude” but that African economies were underperforming, largely due to corruption. Still, he should buttress his arguments with accurate data, given his pan-African audience. – Lee Mwiti (11/09/2017)   

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