Still misleading to say South Africa’s GDP has grown ‘three fold’ since 1994
|UPDATE: After publication of this spot check, Mbindwane responded and said that he had chosen to focus on nominal rates rather than real rates.|
A well-known South African twitter personality, Bongani “Bo” Mbindwane, has recycled a misleading claim about the country’s economic growth.
Mbindwane, head of risk management for the ruling African National Congress (ANC), recently tweeted: “In 1994, South Africa GDP was $120 billion.” He said the ANC “grew it three fold at present statistics”.
In 1994, South Africa GDP was $120 billion. The @MYANC grew it three fold at present statistics - #GrowSouthAfricaTogether #RegisterToVoteANC - now we must grow South Africa to benefit the poor & be equitable in wealth share. pic.twitter.com/HDWBizSMwL
— Bo Mbindwane (@mbindwane) January 26, 2019
“Now we must grow South Africa to benefit the poor & be equitable in wealth share.”
We contacted Mbindwane for the source of his claim but he is yet to provide it. (Note: We will update this report should he do so.)
Nominal GDP grew 2.5 times since 1994
Africa Check fact-checked the claim when President Cyril Ramaphosa made it it in a speech in early January 2019.
Gross domestic product (GDP) is a measure of the size of a country’s economy. It is the market value of all goods and services produced in a given period, usually a year.
Data from the World Bank shows that South Africa’s nominal GDP was US$139.7 billion in 1994. By 2017 it had increased to $349.4 billion. (Note: GDP figures from 2018 are not yet available.) Data from the International Monetary Fund and the South African Reserve Bank show a similar increase.
These estimates do suggest that South Africa’s GDP grew 2.5 times, or three times if you round to the nearest whole number.
‘Completely distorted figures’
But these nominal (or current) GDP estimates are not adjusted for inflation.
Using them produces “completely distorted figures,” Prof Jannie Rossouw, head of the school of economic and business sciences at Wits University, has told Africa Check.
He says “it's important to separate real economic growth from inflation”.
World Bank data for real (or constant) GDP - where the effects of inflation are removed - shows that South Africa’s economy grew 1.9 times from $225.6 billion in 1994 to $426.7 billion in 2017.
South Africa’s real GDP has grown since 1994, but it has not tripled. - Cayley Clifford (30/01/2019)