Datagate Research System

Rebased Economy In Recession

November 8, 2016

By: Faith Nkirote

Let’s go back in time, two years to be precise the Nigerian economy was rebased in April 2014 after a 24 year hiatus. The GDP was rebased from a 1990 base year to a 2010 one. This rebasing placed the value of the economy at USD 509.97 billion from USD 270 billion a whooping 90% increase.

This made it the largest economy in Africa toppling South Africa which had been for a longtime stood as the African Powerhouse. Furthermore, this very increase propelled it to capture 26th position globally.

So you may ask, why rebase? What’s GDP? Why the sudden growth in the economy yet the situation on the ground remains the same? All of these shall be answered in this very piece.

GDP is the Gross Domestic Product which can be defined in layman’s terms as the final value of all officially recognized final goods and services produced within a country over a given period of time usually a year. However, it can be assessed quarterly.

GDP is therefore computed in three ways. The Income approach, the Output approach as well as the Expenditure Approach.

The Income approach places emphasis on incomes generated from engaging factors of production namely labour, capital, entrepreneurship and land. Incomes generated from this engagement are wages, interest, profits and rent respectively. A summation of these rewards informs this approach

Expenditure Approach is the most commonly used approach the world over and it is computed as a summation of consumption, investments, government expenditure and net exports.

Finally, the output approach sums the value of the sales of goods in an economy and adjusting the purchase of the intermediate goods to produce the goods sold.

Nations need to rebase their economies every five years according to the United Nations Statistical Committee. This is in order to capture true picture of sectors that may have otherwise been ignored and have grown in leaps and bounds. It is important to

NORTH KOREA NUCLEAR WEAPON
FEB 9, 2016
North Korea’s rocket launch repeated earlier success rather than breaking new ground, using a nearly identical design from a 2012 launch, experts said, adding the reclusive country probably remained years from building a long-range nuclear missile.
The rocket was based on engines taken from its massive stockpile of midrange missiles based on Soviet-era technology and electrical parts too rudimentary to be targeted by a global missile control regime, the experts said.
South Korea and the United States say Sunday’s launch was a long-range missile test that violated U.N. Security Council resolutions barring the North from using ballistic missile technology. It followed North Korea’s Jan. 6 test of a nuclear device, also in breach of Security Council resolutions.
The three-stage launch vehicle, named Kwangmyongsong, separated its boosters successfully and put an object, which the North says is an Earth-observation satellite, into orbit, South Korea said Tuesday.
A signal from the satellite had yet to be detected, Seoul said. The object North Korea launched in 2012 never sent a detectable signal.
“I suspect the aim of the launch was to repeat the success, which itself provides considerable engineering knowledge,” said Michael Elleman, a missile expert at the London-based International Institute for Strategic Studies.
The South Korean Navy recovered parts of the first-stage booster but failed to retrieve a significant section as it did in 2012 because the stage self-destructed after liftoff, probably with explosives detonated by a timer, the South’s military said.
South Korea said the launch resembled the one in 2012. The shape of the rockets was similar, as were the locations where the first and second stages splashed into the sea, it said.
The U.N. Security Council has imposed layers of sanctions against the North for its nuclear tests and long-range rocket launches going back to 2006, banning arms trade and money flow that can fund its arms program.
But the North has managed to circumvent those measures in pursuing a rocket program, widely suspected to be aimed at building an intercontinental ballistic missile (ICBM) that could threaten the continental United States, and its fourth nuclear test last month.
“Sanctions raise the cost and impact reliability, but a determined country can access the needed items if it is a priority acquisition,” Elleman said.
After the 2012 launch, South Korea retrieved a number of parts associated with the first-stage booster, including one of the steering engines, a nearly intact section of the fuel tank that contained propellant, wiring and pressure sensors.
Some of those components were imported, “ranging from cannibalized Soviet Scud parts to equipment produced in the United States, Europe and Asia,” said Jeffrey Lewis, a nuclear expert at the Middlebury Institute of International Studies.
“Most of the items are available commercially, off-the-shelf and are not controlled. The underlying components are less important than North Korea’s ability to integrate them in a functioning rocket program,” he said.
If the Kwangmyongsong was powered by the same system as the Unha-3 launched in 2012, it used a cluster of Rodong missile engines with a thrust of about 27 tons each encased in an aluminium-magnesium alloy body, welded unevenly by hand.
North Korea is believed to have more than 200 medium-range Rodong missiles with a range of 1,300 km (800 miles), developed from Scud missiles with Soviet technology.
South Korea said it believes the North’s rockets can fly more than 10,000 km (6,200 miles), putting the mainland United States in range.
The boosters likely performed similarly in terms of thrust and burn time to the Unha-3, indicating the North again launched a vehicle that would be optimized to launch a satellite, not a ballistic missile, which would require higher thrust.
“Increasing thrust is a delicate issue, and depending on how much, you quickly have to completely redevelop the whole engine,” German aerospace engineer Markus Schiller said.
While sanctions have not stopped the North’s rocket development, they likely limit what it can make or secure in large quantities of material, equipment and fuel that are needed to quickly make advances.
Some experts believe the North is a decade or more away from being able apply what it learns from its space launch vehicles to building an ICBM capable of threatening the U.S. West Coast. Such a missile would have to be vastly bigger than the last two rockets launched.
The North has also demonstrated no evidence of significant work in building and testing a nuclear warhead rugged and stable enough to withstand the stress of re-entry to atmosphere and detonate as intended when it reaches its target.
Most experts believe it has also yet to show, after four nuclear tests over 10 years, all with relatively small yields, that it has successfully weaponized a nuclear device, let alone miniaturized one to fit on a missile.
Schiller said if the North were to have made real progress, there is no reason not to demonstrate an advanced rocket rather than turning again to what is probably “their old workhorse.”
“I assume that they are doing the best they can with the Unha, showing a very slow but continuous progress toward a small satellite launch capability,” he said. “Turning this program into a real weapon that is deployed in numbers and could hit cities at the push of a button will take decades at that pace.”