World Economics - Insight , Analysis and Data

World Economics - Insight , Analysis and Data

Counting the Bottom Billion

Measuring the Wealth and Progress of African Economies

Morten Jerven - December 2011

What do the statistics from the international databases tell us about income and growth in Sub-Saharan Africa? Less than we would like to think. The article takes a starting point in per capita GDP estimates in Africa. Recently, Ghana announced a revision of its GDP statistics, increasing its national income estimates by over 60%. This article shows that similar revisions are to be expected in other countries. Many statistical offices are currently using outdated data and methods. It is argued that with the current uneven application of methods and poor availability of data, any ranking of African economies according to GDP levels is misleading. It is argued that the World Bank, prominent among data disseminators, is currently not providing the necessary information to complement its datasets, and that this shortcoming misleads data users.

Introduction

On the 5th of November, 2010, Ghana Statistical Services announced that its GDP for the year 2010 was revised to 44.8 billion cedi (US$29.2 billion)[1] as compared to the previously estimated 25.6 billion cedi (US$16.7 billion). It meant an increase in the income level of Ghana of about 60 percent and that the country moved from being a low income country to a middle income country overnight (Ghana Statistical Service 2010). In response, on the Center of Global Development blog pages, African Development expert Todd Moss exclaimed: “Boy, we really don’t know anything” (Todd Moss 2010). Given this level of error margin in the GDP estimate on Ghana, arguably the most studied country on the continent, what should we think about economic statistics deriving from other African countries?  The news was met with equal bewilderment in Ghana. According to the local news, the UN Resident Coordinator for the United Nations Development Programme went as far as dismissing the new classification as a statistical hypothesis, and emphasising that in terms of its achievements towards the Millennium Development Goals Ghana should still be classified as being among the poorest countries in the world (Enquirer 2011).

When the current President John Atta Mills was campaigning in the presidential elections in 2008 one of his promises was to take Ghana to middle income status by 2020.  Is this sudden increase in Ghana’s GDP a result of pressure to deliver on its electoral promises? This would seemingly fit in well with the phrase usually credited to Benjamin Disraeli, saying tha...

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