National Accounts: 2016

This morning the Namibia Statistics Agency (NSA) released the final 2016 Annual National Accounts. These final figures report growth of 1.1% for 2016, just two months after quarterly figures were released showing growth of 0.1%.  Below are some of the key revisions to the data.

2014 Revisions

Only two sectors saw changes to the figures. Manufacturing sector growth was revised upward by 0.3 percentage points, while growth for the real estate and business services sector was revised upward by 0.1 percentage points. Overall GDP growth for 2014 increased by 0.1 percentage point, from 6.3% to 6.4%.

2015 Revisions

Revisions for 2015 are minor. Manufacturing grew by 1 percentage point more than previously recorded, while growth in the construction sector was revised down by 1 percentage point. Upward revisions of 2 and 1.3 percentage points were recorded for the hotels and restaurants sector and the real estate and business services sector, respectively. Minor upward revisions were also recorded for transport and communication, financial intermediation and education. The wholesale and retail trade, repairs sector was revised down by 0.8 percentage points. In total, this resulted in growth for 2015 being revised down by 0.1 percentage point, from 6.1% to 6.0%.

2016 Revisions

Significant revisions were seen for 2016, with figures for all but three sectors changing. The agriculture and forestry sector supposedly saw an upward revision of 1.2 percentage points, from the -.04% to 0.8% during the protracted drought. All secondary industry sectors were revised upward. Manufacturing saw an upward revision of 2.2 percentage points, growing by 3.4% in 2016. Similarly, the electricity and water sector was revised upward by 2.4 percentage points to 6.8% growth, while the construction sector growth was revised up by 3.0 percentage points to -26.5%. Moving to tertiary industries, the tourism sector saw the greatest revision, up 3.7 percentage points to grow 5.1%. Public administration and defence rose by 1.3 percentage points to record 3.3% growth, while the education sector saw a revision of 1.7 percentage points to grow by 3.5%. In all, growth for 2016 was revised upwards by a contentious 0.9 percentage points. This means that in 2016, Namibia’s GDP grew not by the preliminary 0.2% but rather by an impressive 1.1%.



At first glance, there are a few clear peculiarities in the recent release. Most prominent amongst these are the growth figures for wholesale and retail trade, and public administration and defence. These two lines carry a sizable weighting in the national accounts, at approximately 14% for wholesale and retail trade, and 11% for public administration and defence (collectively, approximately 25% of GDP).

According to the latest release, the two grew by 8.7% and 4.0%, in nominal terms, respectively. On a real basis, they expanded by 3.4% and 3.3%, respectively. Given what we know from the high-frequency data and the budget figures, these growth rates are questionable.

While not perfect, VAT receipts are a good proxy for wholesale and retail trade activity, and VAT grew by just 4.8% between 2015 and 2016 (in nominal terms). Similarly, public sector expenditure actually contracted by 1.7% over the same period, once again, in nominal terms.

Add to this the deflators (implied) between nominal and real GDP for these two lines (5.1% for wholesale and retail trade, and just 0.7% for public administration and defence), and it seems fairly clear to us that real GDP figures are being highly overstated.

By adjusting both nominal growth (in line with the above proxy growth rates), and then deflating these figures by average NCPI for 2016 (of 6.7%), we believe we get a far more accurate picture of real GDP levels and growth. These adjustments change real growth for the two lines to a much more modest, and better supported with anecdotal evidence, -1.8% and -7.8%, respectively.

Factoring this into the overall real GDP levels, we get a growth rate of -0.8% for the year, which is far more in-line with high-frequency and other available data, as well as abundant anecdotal evidence. We must, as a result, once again raise our eyebrows at this most recent statistical release, joining the ever increasing number of voices raising questions as to the accuracy of our official figures.

Download the NSA release and tables below:

Annual National Accounts 2016

National Account Tables 2007-2016 ANA