African Arguments, a think tank that seeks to promote the understanding
of issues about Africa, argues that “One of the most common narratives
that has dominated international headlines is that seven of the ten
fastest growing economies are in Africa. But does this really stand up
to scrutiny? This list was computed by the Economist in 2011, and
continues to be quoted by every major world leader and opinion shaper.
The exercise excluded countries with a population of less than 10
million and also the post-conflict booming Iraq and Afghanistan.
The Economist was reporting forecasts made for 2011 to 2015, and as
African arguments reports, “there is a difference between forecasted and
actually measured growth. According to John Kenneth Galbraith, the
only function of economic forecasting is to make
astrology look respectable. So how good is the IMF at forecasting growth
in Low Income Countries?
Among those on the list of the fastest growers were countries like
Nigeria, Ghana, and Ethiopia. The news that both Nigerian and Ghanaian
GDP doubled following the introduction of new benchmark years for
estimating GDP in 2010 and 2014 should remind us that the pinpoint
accuracy of these growth estimates is lacking.” Still, this is a valid
point by African arguments. Is the ‘seven out of ten fastest growing
economies’ myth really true? Are African economies growing, and who is
benefiting from this growth?
One of the clear inadequacies of African economies is a lack of
appropriate data to measure statistics and data that capture economic
activities. No one knows the exact unemployment rates in the continent.
Also, no one knows the exact levels of GDP that the informal economy
plays into the overall GDP. Indeed, according to Nobel Prize winning
economist, Hernando De Soto, large parts of Africa consist of economic
activity that is not captured by mainstream data, and such people cannot
use their capital to borrow loans from banks, or undertake other
meaningful economic activity.
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