Minister of Finance Dr Bwalya Ng’andu says the rebasing of Zambia’s Gross Domestic Product (GDP) exercise has been postponed due to a lack of resources to execute the process.
This came to light during a question for oral answer session posed by Kantashi Independent member of parliament Anthony Mumba in Parliament, Thursday, who wanted to find out when the process of rebasing the country’s GDP would commence.
In his response, Dr Ng’andu said the exercise had been delayed due to resource constraints.
“The last exercise of rebasing the GDP was undertaken in 2010 and the results clearly revealed that it was understated by 25 per cent. As announced in the 2019 budget speech, government planned to commence the exercise in 2019 and complete the exercise by 2020. However, due to resource constraints, the exercise has been delayed; we expect to commence when resources are available,” Dr Ng’andu said.
And he outlined the benefits of rebasing the GDP.
“The rebasing is an exercise carried out in a bid to account for changes that have occurred in an economy over time. The rebasing will also provide government information on the size and the composition of the economy, therefore, providing room for government to take appropriate measures to collect taxes for service delivery and meet other government obligations,” explained Dr Ng’andu.
“It provides an update on economic management indicators, such as revenue-to-GDP ratio; debt-to-GDP ratio; budget deficit-to-GDP ratio and poverty reduction budget-to-GDP ratio, thereby, supporting informed policy decision-making. Also, it provides a comprehensive register of business establishments for all economic surveys to understand the development in the economy as well as for policy decisions, and it will be critical for providing indicators for measuring progress towards the national and international development goals in a timely and reliable fashion. Rebasing GDP provides critical information on the economy to potential investors.”