Why saying ‘seven out of ten fastest growing economies are in Africa’ carries no real meaning – By Morten Jerven

Posted on August 26, 2014 by AfricanArgumentsEditor

MortenJervenBefore, during and after the US Africa summit one of the most frequently repeated factoids supporting the Africa Rising meme was that ‘seven out of ten fastest growing economies are in Africa.’ In reality this is both a far less accurate and much less impressive statistic than it sounds. More generally, narratives on African economic development tend to be loosely connected to facts, and instead are driven more by hype.

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The ‘seven out of ten’ meme derives from a data exercise done in 2011 by The Economist. The exercise excluded countries with a population of less than 10 million and also the post-conflict booming Iraq and Afghanistan. This left 81 countries, 28 of them in Africa (more than 3 out of 10) and, if you take out the OECD countries from the sample, (which are unlikely to grow at more than 7 percent per annum), you find that every second economy in the sample is in Africa. It might not give the same rhetorical effect to say: ‘on average some African economies are expected to grow slightly faster than other non-OECD countries,’ but that would be more accurate.

And before we literally get ahead of ourselves (The Economist was reporting forecasts made for 2011 to 2015) 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?

According to their own evaluation, IMF forecasts “over-predicted GDP growth and under-predicted inflation.” Another study looked at the difference between the forecasts and the subsequent growth revisions in low income countries, and found that “output data revisions in low-income countries are, on average, larger than in other countries, and that they are much more optimistic.” Forecasts are systematically optimistic all over the world, but in Low Income Countries even more so.

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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. How confident should you be about a 7 percent growth rate when 50 percent of the economy is missing in the official baseline? Recent growth in countries with outdated base years is also overstated.

While Ghana has reportedly had the highest growth rates in the world over the past years, a peer review of the Ghana national accounts noted that “neither a national census of agriculture nor other surveys, such as a crop and live-stock survey, have been conducted…there is no survey to provide benchmark data for construction, domestic trade and services.” It was recently reported that an economic census is being planned for next year. What we do know is that Ghana (together with Zambia, another of the projected ‘top ten growers’) has returned to the IMF to seek assistance following their entry into international lending markets.

Most of the time we simply do not know enough to assert accurate growth rates. There are also known biases and manipulations. Ethiopia, for example, is notable for having long-standing disagreements with the IMF regarding their growth rates. Whereas the official numbers have been quoted in double digits for the past decade, a thorough analysis suggested the actual growth rates were around 5 to 6 percent per annum. More generally, one study used satellite imaging of nighttime lights to calculate alternative growth rates, and found that authoritarian regimes overstate reported rates of growth by about 0.5 to 1.5 percentage points. Another recent study argues that inflation is systematically understated in African countries – which in turn means that growth and poverty reduction is overstated.

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Data bias is carried across from economic growth to other metrics. The pressure on scholars, journalists and other commentators to say something general about ‘Africa’ is relentless, and so the general rule is to oblige willingly. When talking about average trends in African politics and opinion, analysis is influence by the availability of survey data, such as Afrobarometer, and the data availability is biased. According to Kim Yi Donne, on The Washington Post’s ‘Monkey Cage’ blog, of the 15 African countries with the lowest Polity IV rankings, only seven have ever been included in the Afrobarometer, whereas all but one African country rated as a democracy by the same index is included.

Any quantitative study which says something about the relationship between growth and trends in inequality and poverty, relies on the availability of household survey data. One paper boldly stated that African Poverty is Falling…Much Faster than You Think! The data basis was very sparse and unevenly distributed. There were no data points for Angola, Congo, Comoros, Cape Verde, D.R. Congo, Eritrea, Equatorial Guinea, Seychelles, Togo, Sao Tome and Principe, Chad, Liberia, and Sudan. In addition, six countries only have one survey. The database included no observations since 2004 – so the trend in poverty was based entirely on conjecture. Famously you need at least two data points to draw a line. Yet the study included a graph of poverty lines in the Democratic Republic of Congo from 1970 to 2006 – based on zero data points.

A result of doubts about the accuracy of the official evidence, and a dearth of evidence on income distributions, scholars have turned to other measurements. Data on access to education and ownership of goods such as television sets from Demographic and Health Surveys were used to compile new asset indices. In turn, these data were used to proxy economic growth and in place of having a measure of the middle class. In both cases the data may paint a misleadingly positive picture. While claiming to describe all of Africa over the past two decades, these surveys are only available for some countries sometimes.

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The statement ‘seven out of ten fastest growing economies are in Africa’ carries no real meaning. To utter it is merely stating that you subscribe to the hype. It is particularly frustrating, and it surely stands in way of objective evaluation, that the narratives in African Economic Development switches from one extreme to the other so swiftly. The truth lies somewhere between the ‘miracles’ and ‘tragedies’. It is nothing short of stunning that in a matter of 3-4 years the most famous phrase relating to African economies has turned from ‘Bottom Billion’ to ‘Africa Rising’.

Because of a lack of awareness on historical data on economic growth it was long claimed that Africa was suffering “a chronic failure of growth”, but growth is not new to the African economies, growth has been recurring. There is no doubt that there are more goods leaving and entering the African continent today than fifteen years ago. More roads and hotels are being built and more capital is flowing in and out of the African continent than before. But what is the real pace of economic growth? Does the increase in the volume of transaction result in a sustained increase in living standards? The evidence does not yet readily provide us with an answer. It is the job of scholars to give tempered assessments that navigate between what is make-believe and what passes as plausible evidence.

Morten Jerven is Associate Professor at the Simon Fraser University, School for International Studies. His book Poor Numbers: how we are misled by African development statistics and what to do about it is published by Cornell University Press. @MJerven

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Health care divides some Republican Senate rivals

By BILL BARROW

ATLANTA (AP) — Republicans see the 2014 midterm elections as a chance to capitalize on voter frustration with the problem-plagued health care overhaul, but the GOP first must settle a slate of Senate primaries where conservatives are arguing over the best way to oppose President Barack Obama’s signature law.

In intraparty skirmishes from Georgia to Nebraska, the GOP’s most strident candidates and activists are insisting on a no-holds-barred approach. They accuse fellow Republicans — including several incumbent senators — of being too soft in their opposition to the Affordable Care Act and to the president in general.

The outcomes will help determine just how conservative the Senate Republican caucus will be during Obama’s final two years. And they could influence which party controls the chamber, with Democrats hoping that the most uncompromising Republican standard-bearers will emerge from the primaries and fare as poorly in general elections as their counterparts did in several 2012 Senate races. Republicans need to gain six seats for a majority.
Republican Rep. Jack Kingston of Georgia, who wants to succeed retiring GOP Sen. Saxby Chambliss, stepped into the rift recently when he seemed to scold much of his party during an interview on a conservative talk radio show.
“A lot of conservatives say, ‘Nah, just step back and let this thing fall to pieces on its own,” Kingston said. “Well, I don’t think that’s always the responsible thing to do.”

Rep. Paul Broun, one of Kingston’s rivals in a crowded primary field, pounced immediately, declaring in an Internet ad, “I don’t want to fix Obamacare, I want to get rid of it.” Conservative commentators hammered Kingston with headlines like “Kingston has surrendered on Obamacare.”

In Tennessee, state Rep. Joe Carr blasted Sen. Lamar Alexander for serving as a key GOP negotiator in the deal to end the partial government shutdown that resulted from House Republicans’ efforts to deny funding for the health care law. Alexander subsequently described himself as a “conservative problem solver,” a characterization that Carr says “typifies how out of touch he is.”

Kentucky businessman Matt Bevin is using a similar line of attack in trying to unseat Senate Minority Leader Mitch McConnell, as is Mississippi state Sen. Chris McDaniel in his primary challenge to Sen. Thad Cochran. Carr, Bevin and McDaniel all say they’d be more like freshmen Sens. Mike Lee of Utah and Ted Cruz of Texas, tea party favorites who pushed the defunding strategy and vexed their longer-serving colleagues.

In Nebraska and Louisiana, Republican candidates who say they oppose the health care law have had to defend their past positions on health care.

National Republicans settled on Rep. Bill Cassidy as their best shot to beat Sen. Mary Landrieu, D-La. But retired Air Force Colonel Rob Maness notes that Cassidy, as a state senator and a physician in the state’s public hospital system, pushed health care policies similar to those in the Affordable Care Act.

“He has to defend his entire record, regardless of how he’s voted in Washington,” said Maness, a GOP candidate who hopes to unseat Landrieu with tea party support.

Midland University President Ben Sasse, one of several Republicans running in Nebraska for retiring Sen. Mike Johanns’ seat, says he opposes the health care law but has had to explain previous speeches and writings in which he was less absolute, at one point calling the act “an important first step” in overhauling American health care.
“This goes right to the bigger fight between the ideologues and the pragmatists,” said Republican strategist Todd Rehm of Georgia, who isn’t affiliated with any of the eight GOP candidates for Chambliss’ seat. Candidates who want to capture the divided Republican electorate, he said, “see that you can’t compromise on any of it. … The moment you start to sound like you’re open to any compromise, you’ve sold out the ideologues.”

Indeed, Alexander, McConnell, Kingston and Cassidy all voted against the Affordable Care Act in 2010 and for symbolic repeal proposals since then. Some in the GOP leadership say the intraparty struggle is only about tactics, not the bottom line. Carr insists that’s exactly the point.

“Their presumption is that tactics don’t matter because the outcome would be the same,” he said. “But it wouldn’t. There wasn’t a single Republican vote that passed the Affordable Care Act, whether we’re talking establishment, tea party, moderate, conservative, whatever. … So if it’s so bad — and it is — the question is why did establishment Republicans not fight to defund it?”

Leaders of national conservative groups, which have been key players in recent Senate elections, say the distinction is an important consideration as they decide endorsements.

“I would say that any candidate who is a vocal opponent of that (defunding) strategy would certainly cause us hesitation,” said Easton Randall of FreedomWorks political action committee. “The burden is on them to explain what they would do differently to achieve a goal we all claim to share.”

So far, FreedomWorks has endorsed McDaniel over Cochran in Mississippi and Nebraska state Treasurer Shane Osborn over Sasse. The group is watching several other races.

The Senate Conservatives Fund, founded by former Sen. Jim DeMint of South Carolina, split with FreedomWorks in Nebraska, siding with Sasse. But the fund endorsed Maness in Louisiana, Bevin in Kentucky and McDaniel in Mississippi, among others. DeMint now runs the Heritage Foundation, whose political arm also is monitoring several other races.

Those groups’ recent record is mixed. Democrats are hoping for a repeat of 2010 and 2012 races where the far right groups backed less-viable candidates who lost general elections in Colorado, Nevada, Delaware and Indiana. But the same groups also helped elect Lee, Cruz and Marco Rubio in the presidential swing state of Florida.
At FreedomWorks, PAC treasurer and policy chief Dean Clancy dismissed any notion that his efforts would hurt the party.

“Republicans make a mistake when they try to waffle on these issues or sound like Democrat-lite,” he said

Nelson Mandela coup plotters sentenced

The ringleader of a white supremacist plot to assassinate Nelson Mandela and drive black people out of South Africa has been sentenced to 35 years in jail, the national broadcaster has reported.

Former university lecturer Mike du Toit was convicted last year of treason for his leadership role in the plot, after a trial lasting nine years.

He led the Boeremag, a militia of white supremacist loyalists.

In 2002 it attempted to overthrow the governing African National Congress.

Twenty other Boeremag members convicted of high treason were given jail terms of between five and 35 years in the court in Pretoria. Read More

Kenya petition over ‘grass cutting for gang-rape’ tops 1million

16 year old Liz was walking home from her grandfather’s funeral when she was ambushed by six men who took turns raping her and then threw her unconscious body down a 6-meter toilet pit. Their punishment? Police had them mow their station lawn, then let them go free!

Liz’s horror story has sent the same kind of shockwaves through Kenya that the Delhi gang rape created in India. Now politicians and the police are under pressure to respond.  But women’s groups in Kenya say nothing will truly change unless the government is put under the global spotlight. They are calling on us urgently to help ensure justice is done and that Liz’s nightmare marks a turning-point in Kenya’s rape epidemic.

Nobody has been brought to justice — not the rapists, and not the police. Today, we change that. Let’s stand with Liz right now, before her attackers and the police escape. Click below to get justice for Liz and help make sure no girl anywhere suffers this violence.

More than a million people have signed an online petition demanding justice after three men accused of brutally gang-raping a girl in Kenya were ordered to cut grass as punishment.

The policemen who ordered the punishment should be disciplined for failing to investigate rape charges, the petition said.

The petition – published by online campaign group Avaaz – called on Kenya’s police chief David Kimaiyo to “deliver justice” for the girl.