Ghana “fact” of the day

Two years ago Ghana’s statistical service announced it was revising its GDP estimates upwards by over 60%, suggesting that in the previous estimates about US$13bn worth’s of economic activity had been missed. As a result, Ghana was suddenly upgraded from a low to lower-middle-income country. In response, Todd Moss, the development scholar and blogger at the Center of Global Development in Washington DC, exclaimed: “Boy, we really don’t know anything!”

Here is more, by Morten Jerven. Here is another good paragraph from that article:

Let us be conservative and assume that the GDP in Nigeria merely doubles following the revision. This alone will mean that the GDP for the whole region increases by more than 15%. The value of the increase amounts to nothing less than 40 economies roughly the size of Malawi’s. The knowledge that currently there are 40 “Malawis” unaccounted for in the Nigerian economy should raise a few eyebrows.

I have just pre-ordered his forthcoming book Poor Numbers: How We Are Misled by African Development Statistics and What to Do about It.


It's just a number.

Back in the 1970s, some wise people started following Italy's imports of various luxury goods and determined that Italians were a lot wealthier than they were admitting to government bureaucrats. Recently, Google's aerial pictures of Athens showed about two orders of magnitude more swimming pools than property tax assessors were aware of.

That sounds a lot like this one famous economist I know who claims that US median incomes have stagnated since 1980. Yet basic consumption statistics tell a different story: residential square feet per capita, meat consumption, textile consumption, electricity consumption, automobiles, airline travel, and many other things (not even counting all the awesome products invented that weren't even around in 1980). Somehow all these things have exploded during the same period of "stagnation"


Hmm... I thought that median (as opposed to mean or per capita) consumption of those items shows more stagnation.

Yes, the 1% are eating on average 30 times more meat than they did in 1980, while the Wal Mart masses live on beans.

They must finally be calculating all the money moving around Nigeria from the Nigerian National Petroleum Corporation, lotto winners and assorted Princes. There seems to have been untold millions of $ in accounts no one knew about just waiting to be transferred out.

All the stats service needed was their bank account number and the new data was theirs.

With regards specifically to Ghana since I live and work at the University of Ghana this is not new information. Economists have been grappling with it here since colonial times. The informal economy has always been impossible to measure accurately. At the same time it is obvious that the informal economy is huge, probably bigger maybe much bigger than the recorded economy. When I go to the market and spend two cedis that money disappears completely from any formal records until it finally gets recirculated into an enterprise that actually submits such records to any tax authorities. When you live in Ghana you become aware that the material standard of living of people is much greater than the official numbers indicate. The country for instance is considerably richer than Kyrgyzstan where I used to live far, far richer than a mere comparison of the official numbers would indicate.

“Boy, we really don’t know anything!” Much as non-economists suspected.

"In the case of Ghana, their previous base year was made in 1993. Quite obviously, the structure of the economy has changed radically since then, partly due to the introduction of new technologies, such as the mobile phone and partly due to economic policy, such as the continued liberalisation and importance of non-state delivery of services such as in tertiary education."

I wonder how much of this is due to the recent upswing in the price of gold.

I'm disappointed. This post should have been titled

"We're not as poor as we thought"

Please revise all the cross country regression based "results", Chris Blattman, all of you who do this sort of thing.

Todd Moss, the development scholar and blogger at the Center of Global Development in Washington DC, exclaimed: “Boy, we really don’t know anything!”

Finally, an economist who knows something.

Todd Moss, you are the wisest of bloggers.

The extra GDP comes from Americans trying to help a guy collect money from the Nigerian lottery.

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