Data gaga

By Bright Simons

A cynic with an attitude called Aldous Huxley once made some remarks to the effect that experts go on meandering excursions in search of understanding only to discover at the destination that non-experts had been at the same spot all along.

One matter that unites development experts and non-experts alike is the glaring conflict between economic growth rates in Africa over the last three decades and outcomes in human development and standards of living in the majority of countries on the continent.

What the statistics clearly show is that Africa has experienced consistent growth over the last two or three decades averaging more than 5% in many of the continent’s countries. What it appears unable to show with similar clarity is where all the accumulating wealth has gone. The schools, hospitals, roads, agricultural research stations, water purification plants and electricity sub-stations, among other so-called “amenities”, don’t tell a story of sustained improvement.

Some blame corruption, and there is no doubt that this is a problem. The truth however is that by empirical criteria such as those used in the various perception indices around the world, notably the famous one by Transparency International, African corruption seems comparable to that of other emerging regions such as Asia.

One may concede to a notion of the specific “types” of corruption in Africa being particularly anti-development, concluding therefore that they pose a disproportionate threat to wealth creation beyond their size or depth. Someone may push this point home by showing a higher propensity on the part of corrupt African elites to siphon funds out of the continent rather than reinvest the ill-gotten loot within the region.

Such a view is plausible. The problem however is that we are talking about “official” growth rates here not the shadow economy. The official economy is tracked, so any evidence of high repatriation of the gains of graft would show up. Any excessive laundering has, to put it crudely, already been accommodated in the growth model. It is the resultant, rather respectable, numbers that we are here proclaiming to be somewhat unreflective of living conditions on the ground, not “the number that would have been” if the siphoning of funds was less unrestrained.

It is readily conceded that high population growth rates in most of Africa also detract from the net effect of growth. This is widely acknowledged in the literature. Nevertheless, even accounting for these population dynamics still leaves a respectable 3% a year or so of GDP growth. That’s still quite decent if sustained for the length of time some African countries have been growing. So it is baffling to note results of the oft-repeated comparisons between Africa today and Africa 50 years ago.

African development statisticians routinely come up with mind-boggling data to show significant retrogression in living standards as captured by per capita measurements of a wide range of indicators, including income and literacy.

If the growth rate has been so consistently positive for so many years now why does it appear then that in many African countries the ordinary masses are worse off?

The traditionalist will at this juncture still try to salvage the integrity of their craft as development specialists by pointing to the “lost decades” of the 1970s and early 80s in Africa, and perhaps even take partial refuge in a vague link between human regression in Africa and ostensible deepening inequality.

Both points are valid in isolation. For quite some time many African countries were in the doldrums, wracked by war and the torrents of geopolitics and geo-economics. It does also appear upon casual glance that the gulf between the rich and poor is widening on the continent.

Still, the stable times have now cumulatively lasted longer than the lost decades in many African countries, like Zambia, Ghana, Tanzania, and even Cameroon and Uganda. Furthermore the growth spurts in some countries like Mozambique and Rwanda have in many years been way above the African average, providing hence credible offsets to much of the stagnation bred during the bad times of intra-state genocide and systemic infrastructure collapse.

As for growing inequality, there is little beyond the anecdotal evidence to provide it with the level of potency it will need to be able to explain away the original puzzle of this post. No comprehensive, credible, analysis of post-independence country-by-country income distribution in Africa lends firm credence to a notion of uniform retardation in living standards caused by inequality.

How then to exorcise this ghost of incongruity from the machine of African development statistics?

Here is where the provocation must deepen. Development specialists on the continent should cease poking around at the objects of their study and look inwardly at the state of their craft itself.

Official statistics on the African continent are poorly collected in most countries. In a recent controversy in Ghana, it emerged that the national statistical office was utilizing woefully inadequate market price data in the computation of inflation figures.

The gross underestimation of inflation in this manner will lead to a glamorisation of historical and contemporary economic performance through an overestimation of the real rate of GDP growth. That is to say, in real terms the economies may be growing slower than usually estimated.

The inflation issue is mechanical. There is another issue that is, however, structural. No GDP evaluation model in Africa that I have seen includes some kind of “depreciation factor”. On a continent with such limited technical capacity, social and physical infrastructure, which constitutes the capital stock of nations, may deteriorate faster, and the sheer lack and weakness of said capital stock might compound the overall effect of such depreciation.

Unfortunately, it is elementary in accounting that you cannot hide depreciation on the balance sheet – sooner or later it hits the bottom line with a vengeance.

In making the above points we are consciously disassociating ourselves from those who assume uncritically that growth in GDP should not necessarily reflect in living standards anyway. That kind of reasoning usually bases its validity on the sectoral distribution of the gains of growth as well as the actual sources of growth in a national economy.

It is sad however to note a usual lack of rigour in pursuing the investigation into the mechanics of actual economies in Africa to determine whether in real growth is indeed happening at the pace claimed but is being skewed and distorted by configurational defects in national economies and or improper welfare dynamics.

Clearly, from even the brief sketch above, it should be perfectly sound to consider a more provocative alternative approach, one based on questioning the very fact of sustained real growth.

Such a conduct after all should not be any more neurotic than the prevailing norms of behaviour in the world of development punditry today.

Bright Simons is a social entrepreneur. He is the inventor of the mPedigree Pharmaceutical Quality Assurance System (www.mPedigree.Net) and a fellow of IMANI-Ghana, a think-tank based in Accra.