Tanzania economy overtakes shit hole Kenya

[KenyanPlato]

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<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Eeh measured correctly (in PPP$) Tanzania’s economy is larger than Kenya’s. When I forecasted this 4 years, I was almost ran out of town. <a href="https://t.co/5ZEouDSL5H">https://t.co/5ZEouDSL5H</a><a href="https://t.co/CVnCSQHzHv">https://t.co/CVnCSQHzHv</a> <a href="https://t.co/SDyTMdzNeK">https://t.co/SDyTMdzNeK</a> <a href="https://t.co/cH3RnrXUM6">pic.twitter.com/cH3RnrXUM6</a></p>&mdash; David Ndii (@DavidNdii) <a href="

Eeh measured correctly (in PPP$) Tanzania’s economy is larger than Kenya’s. When I forecasted this 4 years, I was almost ran out of town. https://t.co/5ZEouDSL5Hhttps://t.co/CVnCSQHzHv https://t.co/SDyTMdzNeK pic.twitter.com/cH3RnrXUM6

— David Ndii (@DavidNdii) March 5, 2020

?ref_src=twsrc%5Etfw">March 5, 2020</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

[RV Pundit]

PPP is not used for international comparison. Nominal GDP - Kenya at nearly 100B dollars nearly double TZ at 60B.

[KenyanPlato]

TZ is firing at all cylinders they are growing 1 to 2 percent more than that shit hole called Kenya ..

[KenyanPlato]

https://www.thecitizen.co.tz/news/Tanzania-leads-Kenya-in-the-list-of-dollar-millionaires/1840340-5479196-view-asAMP-mierra/index.html

Screwball is such a fuckup and waste of sperm.

[Kim Jong-Un's Pajama Pants]

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Eeh measured correctly (in PPP$) Tanzania’s economy is larger than Kenya’s. When I forecasted this 4 years, I was almost ran out of town. <a href="https://t.co/5ZEouDSL5H">https://t.co/5ZEouDSL5H</a><a href="https://t.co/CVnCSQHzHv">https://t.co/CVnCSQHzHv</a> <a href="https://t.co/SDyTMdzNeK">https://t.co/SDyTMdzNeK</a> <a href="https://t.co/cH3RnrXUM6">pic.twitter.com/cH3RnrXUM6</a></p>&mdash; David Ndii (@DavidNdii) <a href="

Eeh measured correctly (in PPP$) Tanzania’s economy is larger than Kenya’s. When I forecasted this 4 years, I was almost ran out of town. https://t.co/5ZEouDSL5Hhttps://t.co/CVnCSQHzHv https://t.co/SDyTMdzNeK pic.twitter.com/cH3RnrXUM6

— David Ndii (@DavidNdii) March 5, 2020

?ref_src=twsrc%5Etfw">March 5, 2020</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

I am always confused by PPP.  It seems to normalize how much a dollar can get you in one economy.  But does it make sense to apply to the total value of goods produced?

[KenyanPlato]

GDP is shit

[RV Pundit]

Yes - and I think it meant to be used internally - for poverty measuring or etc.

I am always confused by PPP.  It seems to normalize how much a dollar can get you in one economy.  But does it make sense to apply to the total value of goods produced?

[MOON Ki]

I am always confused by PPP.  It seems to normalize how much a dollar can get you in one economy.  But does it make sense to apply to the total value of goods produced?

Ndii's credentials as an economist are well known, so I'd be wary of Nipate Experts' "PPP is not used for international comparison".    In fact, major uses of PPP are by international organizations, for international comparisons.     

PPP figures that really matter: World Bank, IMF, EU, and OECD.   The World Bank's figures are under its International Comparison Program.  (The name alone ought to be helpful.)  A brief description of that program will be found here: https://www.worldbank.org/en/programs/icp

There you will find this statement that is line with Ndii's comments:

Due to large differences in price levels across economies, market exchange rate- converted GDP does not accurately measure the relative sizes of economies.

The accompanying leaflet gives an example that makes even clearer the point that Ndii is trying to make:

For example, if market exchange rates were used in converting GDP, India would be ranked 9th or 10th in the share of world GDP. When PPPs are used instead, it is ranked third, which is a more accurate reflection of its share of world GDP.

And for the EU (under EuroStat), there is this on the EU's use of PPP:

The 2 main purposes are:

- To convert national accounts aggregates into comparable volume aggregates. In particular, PPPs can be used to compare the Gross Domestic Product (GDP) of different countries without the figures being distorted by differing price levels in those countries.

- To analyse relative price levels across countries. For this purpose, the PPPs are divided by the current nominal exchange rate to obtain a price level index (PLI) which expresses the price level of a given country relative to others.

https://ec.europa.eu/eurostat/web/purchasing-power-parities/overview

And on the Eurostat-OECD webpage:

PPPs provide a clearer picture of the relative size of economies

PPP-based GDP data provide a clearer picture of the relative importance of economies than comparisons based on market exchange rates.

http://www.oecd.org/sdd/prices-ppp/ppps-2011-benchmark-year.htm

[RV Pundit]

The same IMF and WB uses nominal GDP and nominal GDP per capita as default comparator, to classify countries as developed or not.Its reason why TZ is third world country with GDP per capita about 1,000 and Kenya is about twice that, a low middle class country edging towards a proper middle class like South Africa.Kenya is bigger economy than Tanzania if you check nearly everything... despite being about half TZ and with less arable land.Ppp is only useful for internal use...like tracking poverty internally.The more the difference btw ppp n nominal the more undeveloped that country is.

[MOON Ki]

The same IMF and WB uses nominal GDP and nominal GDP per capita as default comparator, to classify countries as developed or not.Its reason why TZ is third world country with GDP per capita about 1,000 and Kenya is about twice that, a low middle class country edging towards a proper middle class like South Africa.Kenya is bigger economy than Tanzania if you check nearly everything... despite being about half TZ and with less arable land.Ppp is only useful for internal use...like tracking poverty internally.The more the difference btw ppp n nominal the more undeveloped that country is.

Of course, boss.   You are Nipate's Chief Economist, and neither I nor Ndii (who apparently needs some education on basic economics) is in a position to argue with you.  I'll leave it to others to do their own homework and reach their own conclusions. 

[RV Pundit]

Which Ndii are we talking about here? The obese failed politician or the former economist with post-grad in Oxford in the waste bucket department of  African Economic Affairs that he wears as a badge of honor. Equity Bank had the misfortune of having him in their board and he kept churning negative reports & propaganda. They fired him and you know what company now is what - about the GDP of Burundi. Their asset base is now nearly 10B dollars. If they had listened to Dr Ndoom?

There is a reason why the IMF or WB uses NOMINAL GDP...not GDP (PPP) to compare countries.

Let quote Wikipedia..instead of Dr Ndoom.

GDP comparisons using PPP are arguably more useful than those using nominal GDP when assessing a nation's domestic market because PPP takes into account the relative cost of local goods, services and inflation rates of the country, rather than using international market exchange rates which may distort the real differences in per capita income.[3] It is however limited when measuring financial flows between countries and when comparing the quality of same goods among countries.[4] PPP is often used to gauge global poverty thresholds and is used by the United Nations in constructing the human development index.[3] These surveys such as the International Comparison Program include both tradable and non-tradable goods in an attempt to estimate a representative basket of all goods.[3]

Of course, boss.   You are Nipate's Chief Economist, and neither I nor Ndii (who apparently needs some education on basic economics) is in a position to argue with you.  I'll leave it to others to do their own homework and reach their own conclusions. 

[MOON Ki]

Which Ndii are we talking about here? The obese failed politician or the former economist with post-grad in Oxford in the waste bucket department of  African Economic Affairs that he wears as a badge of honor.

I don't know about "obese failed politician", but parts of what you write suggest that we have the same Ndii in mind.    As to "waste bucket department" at Oxford, I can't comment on that.   No doubt you have much better and higher degrees (in all sorts of things) from much better departments in much better universities; please feel free to enlighten us.  It might even help Ndii learn where to go for a "proper" education---in what, and at what level.

There is a reason why the IMF or WB uses NOMINAL GDP...not GDP (PPP) to compare countries.

Let quote Wikipedia..instead of Dr Ndoom.

Ah, yes, of course Wikipedia is always better ... because of the quality control on the contributions there.    And IMF, WB, etc could possibly be very confused as to what they are measuring, where they measure it, and how they apply their measurements.  And perhaps I was mislead by some statements on, say,  the International Comparison Program of the World Bank (which you mention):

Due to large differences in price levels across economies, market exchange rate- converted GDP does not accurately measure the relative sizes of economies and the levels of material well-being. PPPs make it possible to compare the output of economies and the welfare of their inhabitants in ‘real’ terms, thus controlling for price level differences across countries.

https://www.worldbank.org/en/programs/icp

My command of the English language is probably not as good as yours, but I interpret phases such as "relative sizes of economies", "compare output of economies", and "across countries" to mean that countries are being compared and it is not the case that "Ppp is only useful for internal use...like tracking poverty internally".   (More links already provided above for those who need them.)  But one of the things I like about nipate.org is that I always learn so much from people like you; asante sana, ndugu!

[RV Pundit]

The simple question again. Why is Nominal GDP nominal standard measure that IMF and WB and everyone use to compare country GDP? Relative depends on many things. Relative to the quality of goods and services? 

Tanzania will only have a bigger economy than Kenya when they better us in nominal GDP. That is not happening soon. The gap is huge.

Which Ndii are we talking about here? The obese failed politician or the former economist with post-grad in Oxford in the waste bucket department of  African Economic Affairs that he wears as a badge of honor.

I don't know about "obese failed politician", but parts of what you write suggest that we have the same Ndii in mind.    As to "waste bucket department" at Oxford, I can't comment on that.   No doubt you have much better and higher degrees (in all sorts of things) from much better departments in much better universities; please feel free to enlighten us.  It might even help Ndii learn where to go for a "proper" education---in what, and at what level.

There is a reason why the IMF or WB uses NOMINAL GDP...not GDP (PPP) to compare countries.

Let quote Wikipedia..instead of Dr Ndoom.

Ah, yes, of course Wikipedia is always better ... because of the quality control on the contributions there.    And IMF, WB, etc could possibly be very confused as to what they are measuring, where they measure it, and how they apply their measurements.  And perhaps I was mislead by some statements on, say,  the International Comparison Program of the World Bank (which you mention):

Due to large differences in price levels across economies, market exchange rate- converted GDP does not accurately measure the relative sizes of economies and the levels of material well-being. PPPs make it possible to compare the output of economies and the welfare of their inhabitants in ‘real’ terms, thus controlling for price level differences across countries.

https://www.worldbank.org/en/programs/icp

My command of the English language is probably not as good as yours, but I interpret phases such as "relative sizes of economies", "compare output of economies", and "across countries" to mean that countries are being compared and it is not the case that "Ppp is only useful for internal use...like tracking poverty internally".   (More links already provided above for those who need them.)  But one of the things I like about nipate.org is that I always learn so much from people like you; asante sana, ndugu!

[MOON Ki]

The simple question again. Why is Nominal GDP nominal standard measure that IMF and WB and everyone use to compare country GDP? Relative depends on many things. Relative to the quality of goods and services? 

Given the basis on which you deride Ndii, I'd say this: No doubt you have much better and higher degrees (in all sorts of things) from much better departments in much better universities; please feel free to enlighten us.   I'm sure you can give us a good explanation of "relative" in this or any other context.  As an expert I'm sure that you can give really good explanations of things that I can only cut-and-paste.

As to what IMF and WB and "everyone" uses, I have already confessed my ignorance of such matters.  But I imagine that there must be something to, say, the IMF's International Comparison Program.   I'd like to imagine that when they produce tables such as this one

https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD

that lists countries by GDP-per-capita-PPP the idea is that there will be some  comparison across countries.  For example, I can see from those figures that even in 2018 Kenya was not that much better off than Tanzania ... pretty much the same actually.   And you can find all sorts of other similar comparative lists and figures from the IMF and WB.   But perhaps they don't use them for anything other than jerking off in their offices?    I don't know although they all have a bunch of stuff that claims that they use PPP figures for all sorts of international comparisons.   

Never mind.  I consider myself fortunate to be here on nipate.org,   where I can learn so much more (from people like you). 

Thank you, ndugu. Kenya juu!

[RV Pundit]

GDP (PPP) and GDP PPP per capita have their usefulness. Nobody has said it's useless. The default comparator is nominal GDP. Kenya has a bigger economy - nearly 100B - compared to Tanzania(60B). Kenya is also classified as a lower-middle-income economy by IMF & WB based on nominal GDP - while TZ is still not yet there.

When it comes to poverty analysis - then PPP kicks in - and you'll see the poverty ratio in Kenya and TZ are not very much different. There you're looking at say at a household affording to buy food etc etc.

So in short  Kenya has a bigger economy than Tanzania but the average Kenya and Tanzania are doing equally bad poverty wise. Tanzanian may earn less (low GDP) but he will be able to buy more (Purchasing power parity) than a Kenya

Finally, you don't NEED TO GO TO UNIVERSITY or even SCHOOL to learn these things.

The late Professor calestous juma of Harvard university never stepped in any classroom. He is self-taught.

Then you have somebody who went to obscure depart of Africa Economics (I like Prof Paul there) wearing his ox-ford degrees and engaging in twitter economics..and avoiding forums where he can be challenged by trained economists like at UON - where he refused to meet Dr Kamau Thugge.

Given the basis on which you deride Ndii, I'd say this: No doubt you have much better and higher degrees (in all sorts of things) from much better departments in much better universities; please feel free to enlighten us.   I'm sure you can give us a good explanation of "relative" in this or any other context.  As an expert I'm sure that you can give really good explanations of things that I can only cut-and-paste.

As to what IMF and WB and "everyone" uses, I have already confessed my ignorance of such matters.  But I imagine that there must be something to, say, the IMF's International Comparison Program.   I'd like to imagine that when they produce tables such as this one

https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD

that lists countries by GDP-per-capita-PPP the idea is that there will be some  comparison across countries.  For example, I can see from those figures that even in 2018 Kenya was not that much better off than Tanzania ... pretty much the same actually.   And you can find all sorts of other similar comparative lists and figures from the IMF and WB.   But perhaps they don't use them for anything other than jerking off in their offices?    I don't know although they all have a bunch of stuff that claims that they use PPP figures for all sorts of international comparisons.   

Never mind.  I consider myself fortunate to be here on nipate.org,   where I can learn so much more (from people like you). 

Thank you, ndugu. Kenya juu!

[Kim Jong-Un's Pajama Pants]

I am always confused by PPP.  It seems to normalize how much a dollar can get you in one economy.  But does it make sense to apply to the total value of goods produced?

Ndii's credentials as an economist are well known, so I'd be wary of Nipate Experts' "PPP is not used for international comparison".    In fact, major uses of PPP are by international organizations, for international comparisons.     

PPP figures that really matter: World Bank, IMF, EU, and OECD.   The World Bank's figures are under its International Comparison Program.  (The name alone ought to be helpful.)  A brief description of that program will be found here: https://www.worldbank.org/en/programs/icp

There you will find this statement that is line with Ndii's comments:

Due to large differences in price levels across economies, market exchange rate- converted GDP does not accurately measure the relative sizes of economies.

The accompanying leaflet gives an example that makes even clearer the point that Ndii is trying to make:

For example, if market exchange rates were used in converting GDP, India would be ranked 9th or 10th in the share of world GDP. When PPPs are used instead, it is ranked third, which is a more accurate reflection of its share of world GDP.

And for the EU (under EuroStat), there is this on the EU's use of PPP:

The 2 main purposes are:

- To convert national accounts aggregates into comparable volume aggregates. In particular, PPPs can be used to compare the Gross Domestic Product (GDP) of different countries without the figures being distorted by differing price levels in those countries.

- To analyse relative price levels across countries. For this purpose, the PPPs are divided by the current nominal exchange rate to obtain a price level index (PLI) which expresses the price level of a given country relative to others.

https://ec.europa.eu/eurostat/web/purchasing-power-parities/overview

And on the Eurostat-OECD webpage:

PPPs provide a clearer picture of the relative size of economies

PPP-based GDP data provide a clearer picture of the relative importance of economies than comparisons based on market exchange rates.

http://www.oecd.org/sdd/prices-ppp/ppps-2011-benchmark-year.htm

Thanks for the info.  I'll check the links hopefully soon.  Mine is a question coming from genuine ignorance; not an assumption that I know better.  I am just curious.

To demonstrate my cartoonishly simple(perhaps wrong) understanding.  Kenya produces 2 pies, Tz produces 1 pie.  But according to PPP, an individual Tanzanian is able to afford a slightly larger piece of his pie than a Kenyan.  I can understand that bit.

What I find harder to wrap my head around is the leap that because a Tzian can get slightly more of his pie, that somehow Tz produces more pie than Kenya overall.  Does that really mean that Tz in actual fact produces more than 2 pies?

[RV Pundit]

Let me help you. GDP is called National Accounts. It very simple maths.

Quantity * Price.

IT IS NOT DONE by economists. It done by BSC Maths - by Statistics bodies. It is the simplest of maths out there. Slightly harder than census

So you get list of all goods and services ( - UNSD has a little list of taxonomy for that - ISIC - list of economic activities)

You go to Agriculture -> Farming -> Pie - quantity produced 1M - average market prices in Tshs (2000) - GDP contribution - 1M*2000
If this pie was also converted into Pie Juice - then there is a manufacturing component to that.
Manufacturing -> Food Processing -> Pie Juice -> 10 million litres * price 1000.

So all computation is done at the national level in TSHS - based on the average market price in Tanzania.

Quantity is easy -- you just need to count or estimate.

Prices is also easy - statistic body will sample average prices from their markets, shops, supermarket.

Then TZ will declare their economy is 60 trillion TSHs.

End of story.

IMF and WB - then start their work there - because they need to compare countries.

The easiest - they convert 60 trillion TSH to USD using the current official exchange rate of USD to TSHs - it becomes NOMINAL GDP. USD is a de facto global currency. No long stories.

They also re-look at the market prices....and convert those to USD...and see if there are differences. Pie in Kenya and TZ should ideally be say 10 cents USD..but in TZ is cheaper...so there is a purchasing parity.

But it doesn't take into account why the price differences? Are the quality of Pies the same? Are folks earning the same wages and salaries?

Thanks for the info.  I'll check the links hopefully soon.  Mine is a question coming from genuine ignorance; not an assumption that I know better.  I am just curious.

To demonstrate my cartoonishly simple(perhaps wrong) understanding.  Kenya produces 2 pies, Tz produces 1 pie.  But according to PPP, an individual Tanzanian is able to afford a slightly larger piece of his pie than a Kenyan.  I can understand that bit.

What I find harder to wrap my head around is the leap that because a Tzian can get slightly more of his pie, that somehow Tz produces more pie than Kenya overall.  Does that really mean that Tz in actual fact produces more than 2 pies?

[MOON Ki]

GDP (PPP) and GDP PPP per capita it uses. Nobody has said it's useless. The default comparator is nominal GDP. Kenya has a bigger economy - nearly 100B - compared to Tanzania(60B). Kenya is also classified as a lower-middle-income economy by IMF & WB based on nominal GDP - while TZ is still not yet there.

When it comes to poverty analysis - then PPP kicks in - and you'll see the poverty ratio in Kenya and TZ are not very much different.

So in short  Kenya has a bigger economy than Tanzania but the average Kenya and Tanzania are doing equally bad poverty wise. Tanzania may earn less (low GDP) but he will be able to buy more (Purchasing power parity) than a Kenya.

Thank you, ndugu.   You are indeed a giant brain.    I knew you would be able to explain it to me.   That's why I come to nipate.org: I always learn a whole bunch of stuff.  Maybe you can help me with this one too:  http://pubdocs.worldbank.org/en/332341517441011666/PPP-brochure-2017-webformat-rev.pdf

See where it gives the example that

For example, if market exchange rates were used in converting GDP, India would be ranked 9th or 10th in the share of world GDP. When PPPs are used instead, it is ranked third, which is a more accurate reflection of its share of world GDP.

How does "share of world GDP" fit in with "cannot be used for international comparisons ... for internal use only ... poverty"?   And why does the World Bank consider a more accurate measure of such things.  (As always, thank you very much for the enlightening answer you will provide.)

Finally, you don't NEED TO GO TO UNIVERSITY or even SCHOOL to learn these things.

The late Professor calestous juma of Harvard university never stepped in any classroom. He is self-taught.

Definitely.  But since you derided Ndii as a "former economist with post-grad in Oxford in the waste bucket department of  African Economic Affairs", I thought I would ask this of you: No doubt you have much better and higher degrees (in all sorts of things) from much better departments in much better universities; please feel free to enlighten us.

Still, On Calestous Juma never stepping into into any classroom, I think I will go with what his last employer (Harvard U) and others have to say; they probably check  on these things.

Juma was a science teacher and journalist before earning his doctorate in science and technology studies from the University of Sussex.

https://news.harvard.edu/gazette/story/2017/12/professor-calestous-juma-leaves-legacy-of-good-work/

He eventually earned degrees in science and technology policy, among other subjects, from the University of Sussex.

https://www.thecrimson.com/article/2017/12/20/calestous-juma-passes/

And so on.   Even The Daily Nonsense has something on this:

The scientist, who attained a teacher’s certificate from Egoji Teacher’s College in 1974, also held a PhD in Science Policy Research from the University of Sussex.

https://www.nation.co.ke/news/Harvard-prof-Calestous-Juma-dies-Boston/1056-4230186-u2s797z/index.html

But if you says  he never stepped into a classroom and is entirely self-taught, apparently getting certificates and degrees on the basis of the sheer force of personality, then we on nipate.org must go with that one.   But what does that have to do asking that you enlighten us on your academic pedigree, so that we can compare it with that of the "post-grad in Oxford in the waste bucket department"?  Help  us here, ndugu; tell us about the great department in the great university that you attended.    Asante sana!

[RV Pundit]

MOi a primary teacher was also very educated. You're a joke.

But if you says  he never stepped into a classroom and is entirely self-taught, apparently getting certificates and degrees on the basis of the sheer force of personality, then we on nipate.org must go with that one.   But what does that have to do asking that you enlighten us on your academic pedigree, so that we can compare it with that of the "post-grad in Oxford in the waste bucket department"?  Help  us here, ndugu; tell us about the great department in the great university that you attended.    Asante sana!

[MOON Ki]

 

I can't argue with that one.   I am indeed a joke!

MOi a primary teacher was also very educated. You're a joke.

But if you says  he never stepped into a classroom and is entirely self-taught, apparently getting certificates and degrees on the basis of the sheer force of personality, then we on nipate.org must go with that one.   But what does that have to do asking that you enlighten us on your academic pedigree, so that we can compare it with that of the "post-grad in Oxford in the waste bucket department"?  Help  us here, ndugu; tell us about the great department in the great university that you attended.    Asante sana!