Africa's Accidental Advancement

How New Statistics Are Boosting the Continent's GDP

The International Monetary Fund’s 2012 World Economic Outlook provided surprising cause for optimism about economic growth in several African countries. Based on the IMF’s estimates, Business Insider recently profiled 20 countries with the highest projected compounded annual growth rate (CAGR) from 2013 through 2017; ten of them are in sub-Saharan Africa, and two are in North Africa. These statistics have spurred some onlookers to argue that Africa is no longer “the hopeless continent” that The Economist dubbed it in May 2000.

It is true that there have been successes in Africa -- perhaps more than are commonly acknowledged. According to many experts, most African economies have been growing at a steady clip since the 1990s. And some experts believe that several African countries are richer than current GDP per capita estimates indicate. Alwyn Young, a professor at the London School of Economics, has convincingly argued that many African countries underreport their GDP because of poor statistical practices and a failure to capture improvements in health, education, and water safety, or to account for increasing ownership of televisions, mobile phones, and refrigerators. His alternative estimates based on data from 29 African countries suggest that growth in Africa may have been as high as 3.7 percent a year between 1990 and 2006. That is almost four times faster than the commonly accepted rates calculated using international data sets.

It might sound like wishful thinking, but there is reason to believe that Young is right and that the official data has missed some big improvements. In 2010, Ghana’s statistical services rightly found that previous GDP estimates had overlooked about $13 billion worth of economic activity. When that sum was added in, the World Bank upgraded Ghana’s status from a low-income country to a lower-middle-income country in 2011. That was, of course, good news for Ghanaians. But it was also a shocking example of how inaccurate the previous numbers were; the World Bank Chief Economist for Africa declared it a “statistical tragedy.”

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