-a basis of GDP per capita at purchasing power parity (PPP) is arguably more useful when comparing living standards between nations, while nominal GDP is more useful comparing national economies on the international market.
The OECD defines GDP as "an aggregate measure of production equal to the sum of the gross values added of all resident and institutional units engaged in production and services (plus any taxes, and minus any subsidies, on products not included in the value of their outputs). An IMF publication states that, GDP measures the monetary value of final goods and services—that are bought by the final user—produced in a country in a given period of time (say a quarter or a year).
Total GDP can also be broken down into the contribution of each industry or sector of the economy. The ratio of GDP to the total population of the region is the per capita GDP and the same is called Mean Standard of Living. GDP is considered the "world's most powerful statistical indicator of national development and progress".
GDP can be determined in three ways, all of which should, theoretically, give the same result. They are the production (or output or value added) approach, the income approach, or the speculated expenditure approach.
The most direct of the three is the production approach, which sums the outputs of every class of enterprise to arrive at the total. The expenditure approach works on the principle that all of the product must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying things. The income approach works on the principle that the incomes of the productive factors ("producers," colloquially) must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes.
In the same vein, Africa’s economies are growing strongly, but growth alone cannot meet the needs of the continent’s poorest citizens, because “nobody eats Gross Domestic Product (GDP), the President of the African Development Bank, Akinwumi Adesina said as he unveiled the Bank’s flagship economic report recently.
The 2020 African Economic Outlook (AEO) showed that the continent’s economies are growing well, higher than the global average. The report projected a steady rise in growth in Africa from 3.4 per cent in 2019 to 3.9 per cent in 2020 and 4.1 percent in 2021.
According to the report, the figures do not tell the whole story across the continent, the poor are not seeing enough of the benefits of robust growth. Relatively few African countries posted significant declines in extreme poverty and inequality, which remain higher than in other regions of the world. According to Adesina “growth must be visible, growth must be equitable, growth must be felt in the lives of people.”
The theme of the 2020 Africa Economic Outlook report, Developing Africa’s workforce for the future, calls for swift action to address human capital development in African countries, where inclusive growth has been held back by a mismatch between young workers’ skills and the needs of employers.
In its recommendations, the report suggests on improving access to education in remote areas, incentives such as free uniforms and text books, banning child labour and improving teaching standards.