The existence of a large number of non-monetized activities in these countries, especially in the agricultural sector, makes computation of the national income more challenging.

This due to the fact that a large quantity of agricultural output in these countries do not reach the market.

The outputs are either consumed directly by farmers or exchanged for other goods and services.

This makes it more difficult to measure the national income.

Those who do not disclose their income or underestimate their incomes to avoid paying higher taxes may cause a loss in government revenues and sales, which are not reflected in the GDP.

Contributing to production such as illegal trade and tax-avoiding activities, are not reported, thus causing the GDP to be underestimated.

For example, food grown in backyard plots, home repairs, clothes sewn at home, and any other instances of do-it-yourself goods and services that people make or perform for themselves, their families or friends are not calculated in the GDP.

During these transactions, no money changes hands and subsequently no payments are recorded.

The services of these professionals are very important is estimating the national income data accurately with minimum errors.

Another important challenge faced is the non-availability of modern machinery such as advanced computers or programs to compute national income data

Data collected on national income, regardless of the method used, has to be analyzed using sophisticated machinery.

Double counting in the national income will appear when both values of final goods and intermediate goods are included.

As most products go through a series of production stages before they reach the market, some of their components are bought and sold over a number of times.

To avoid this problem, the GDP includes only the value of final goods and ignores intermediate goods altgether

Inclusion of the value of intermediate goods will amount to multiple counting which will distort the value of the GDP