Formula for Africa's Rapid Growth: After Almost Five Decades of Independence, How Is Africa Faring in Terms of Economics? Is the Continent Improving, Staying Still or Regressing? How Can It Meet the Millennium Development Goals? Editor Anver Versi Ponders the Issue
Versi, Anver, African Business
For the last three years, the African Development Bank (ADB) has published an invaluable, comparative analysis of Africa's economic performance. The aim of the document--African Economic Outlook (AEO)--is to assess annual economic changes on the continent in order to gauge whether the continent is progressing or regressing.
How does one measure change? What do 'facts and figures' tell us? The authors of the ADB report appear to have kept the adage 'there are lies, damned lies and statistics' firmly in mind in the preparation of their report. Statistics, as we know, can not only hide the truth, they can even mislead.
But intelligent analysis, applied to appropriate statistics, as this document does, can paint a fairly accurate picture of the real state of affairs.
It is also highly commendable that, at long last, an African organisation--the African Development Bank--dealing with real African issues on African soil, has taken the responsibility of translating facts and figures into an analytical narrative. Hitherto, this task was the preserve of international institutions such as the World Bank and the IMF.
While the IMF, the World Bank and other UN reports are exhaustive (some say exhausting!), the agenda they address is not always compatible with Africa's needs. The African Economic Outlook (AEO) on the other hand, is firmly wedded to African aspirations. Thus, while there is little discrepancy in terms of facts and figures between the two sources, the AEO's translation of statistics is much closer to the African reality.
The 2003/2004 AEO does not look at all African countries but focuses its in-depth analysis on 22 countries (see box right). These, together, account for two-thirds of Africa's population and three-quarters of its gross domestic product (GDP). They were the same countries as surveyed in the 2002/2003 report so comparative changes can be calculated. The assessment also provides a continent-wide perspective. (See accompanying story, page 18).
How does one measure change? In the AEO report, economic performance is judged by how near to, or farther away from, countries are in meeting the UN's Millennium Development Goals (MDGs). African Business agrees with the ADB that the MDGs are the true yardstick with which to judge Africa's progress--or lack of it. The box below outlines those goals.
THE ENIGMA OF GROWTH
Before we discuss the ramification of economic growth figures, we should ask ourselves: what are the aims and objectives of national economic policies?
The aims of all national economic policies are fairly straightforward: to ensure that all citizens of a state have access to the basic necessities of life--food, clean water, shelter, clothing, medical care, education, social welfare and gainful employment. These are the basic necessities for sustaining meaningful human life. This is the poverty line. When all the measures required for life are available, we say the people live above the poverty line; where some or all the requirements are absent, we say the people are living below the poverty line.
There are wide differences in how far above or below the poverty line people live. These differences are present within states and between states. We describe this as the standard of living. When most, if not all, the needs and desires of people are met, we say they enjoy a high standard of living; the reverse is true for low standards of living where the majority of needs go unfulfilled.
The role of all national economic policies is first to ensure that all citizens enjoy at least a very basic standard of living above the poverty line and then to keep improving the standard and quality of life.
In fact, the only real purpose of government is to organise people and resources in such a way that basic necessities are met and standards of living keep improving. Governments that succeed in doing this are doing their jobs properly; governments that fail to improve standards of living are failed governments and should, by rights, leave the stage for others. …