I recently went to a book launch for a book titled “Africa: Why Economist Get it Wrong” by Morten Jerven. The biggest premise of the book according to the author is that most of the economic data about Africa are , in my own words frankly speaking made up.
He argues that economic growth and fall are common phenomena, and that as most of would agree that averages can be misleading. This seems as a well researched book and I am looking forward to flipping through my copy.
He insisted the emphasis should be on studying economies rather than economics. By that, he meant that we ought to understand how individual African economies work rather than making sweeping generic statements and assuming that all the countries were similar, and that what worked well in many Western economies would work well in the continent too.
Even though my question at the end of the presentation was whether he was not concerned about sounding patronising by suggested that all was well with African economies, and that it just economists getting it wrong, I have to say I agree with him on a lot of things to an extent.
The most important one is on data collection. I would struggle to understand how productivity output is measured in places where a lot of people practice subsistence farming, craft and trade, and rely mostly on family network informally.
In addition, the recent rebasing of the Nigeria’s economy, for example, to become Africa’s largest economy shows that so much is not being into account. Data collection is one area that needs improvement, and it is not just economic data. However, economic analysts ought to be honest about what they are basing their analysis on or whether it is just their imagination.
It is also true that more effort should be put into understanding how individual economies work. The usual culprits of economic backwardness such as corruption and democracy are obvious to many people, but when African governments decided to follow IMF guidelines in executing Structural Adjustment Programmes, everything ended in disaster.
So does that mean we can pat our leaders on the back and encourage them to do things their own way? Now, I am not an economist and I can’t claim that there is any blue print anywhere for boost any economy event though it common to cite South Korea, Singapore and Malaysia as countries that succeeded to make the big move.
However, I think there is no doubt on the impact of corruption and mismanagement on the economy. Some people argue that corruption exist even in Western economies, but point is that apart from the scale being different, it is the inherent impunity and open acceptance of it that makes all the difference.
My another area of concern is how success is measured on raw data that has little in common with real life. I would suppose that better measures should be about access to electricity, drinking water, healthcare and education.
I think these amenities are no longer linked to culture or ideology. These are basic human needs, and the real proxy to economic progress. The presence of these will make people more productive, and most importantly happier.