Africa’s Oil Shock

This is an opinion piece I recently wrote for Aljazeera English, analysing how African countries are responding to falling global crude oil prices. I reproduce it below:

The plummeting of global crude prices is generating ripple effects worldwide. While oil exporters are reeling from plunging revenues, oil importers are bracing for cheaper oil, and the potential economic stimulus. Global economic relations may also witness profound shifts as the United States overtakes Saudi Arabia as the world’s largest oil producer.Read More »

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Morten Jerven’s “Poor Numbers” and Improving Statistical Capacity in African Countries

I don’t know about you but in the recent past, I had thought the debates in international development in this century had become rather stale. We had moved from Africa the “Hopeless Continent“, “Africa’s Growth Tragedy“, the continent of the “Bottom Billion” and the Trade vs. “Dead Aid” debate, to “Africa is Rising”, Africa “the Hopeful Continent“, Africa “the Next Frontier”, Africa “the Continent of Opportunity” and so on, all heralding Africa’s recent economic “successes” and the vast opportunities that lay ahead. Admittedly, some have adopted a more cautious approach to the overly optimistic Africa-is-Rising narrative.

In the midst of this heated rising- or not-rising-yet debates, the economic historian at the Simon Fraser university, Morten Jerven, burst onto the scene with his position that “we have no idea if Africa is Rising” because we can’t trust the numbers. I came upon Jerven’s work sometime last year through several fascinating academic and op-ed articles he wrote about development statistics and more recently, his foray into the Africa-Rising debate. Coincidentally this week, Jerven was at my department to talk about his recently published book, Poor Numbers: How We are Misled by African Development Statistics and What  to do About It, in a very “lively and refreshing” (words used by at least three people who attended) seminar.

The main  thrust of his argument is that statistics on African economic development (estimates and growth series on poverty, income and population) are unreliable because of the poor statistical capacity of many Sub-Saharan African (SSA) countries from which data on these indices are derived. He notes that it is these data compiled by severely under-equipped national statistical agencies that are used by international financial institutions and development agencies of rich countries.  Jerven points that in extreme cases such as Somalia where economic data is not always available, the World Bank sometimes adds up economic data from neighbours Kenya and Sudan, calculates an average from these, and then uses this average to make projections about Somalia!

Jerven posits further that the Strucutral Adjustment Program (SAP) of the 1980s had a devastating impact on the institutional capacity of such statistical agencies, and that the Millennium Development Goals (MDGs) agenda arguably further aggravated the situation because it put pressure on stretched and poorly-equipped statistical offices to prepare reports on social statistics related to the MDGs. This sort of pressure for specific data is symptomatic of a problematic trend towards collection of “ad-hoc data” by poorly equipped agencies, as the basis of “evidence-based policy” which in actuality ends up being “policy-driven evidence”, says Jerven. He thus makes a convincing case for improving the national statistical capacity of individual African countries in order to generate more accurate and reliable data, which he argues, have a huge impact on the welfare of citizens in Sub-Saharan African countries.

Indeed, the fact that a number of African countries including  Nigeria, are presently reviewing their Gross Domestic Product (GDP) base estimates which is certain to increase their national income, arguably confirms some of his core arguments. We are all familiar with how Ghana overnight, transitioned from lower-income to middle-income status on the 5th of November 2010 after the revisions bumped its GDP up by 60%. Nigeria’s GDP rebasing currently underway could see a huge rise in national income by 60% from $247 billion to $395.2 billion according to the Nigerian National Bureau of Statistics. Jerven says this revision could capture other economic sectors previously excluded which he equates to “40 Malawis (that) exist inside the Nigerian economy”. That is profound!

One important question however, is that even if the numbers are more accurately captured in these GDP revisions, and we realise that many SSA countries we hitherto thought of as “poor” or low-income countries, are actually closer to “emerging” or middle-income status, what do these numbers really mean for poverty reduction and human development? Are the poor and deprived in these countries leaving the poverty trap enmasse into middle class status? The statistics may be getting better, but are people’s lives getting any better? Importantly, what implications do these revisions have for the very definition of poverty and deprivation —  would these concepts need to be revised and redefined too? These are fundamental questions that policy makers, development experts and researchers ought to, and are hopefully thinking about.

In the meantime, I got my own copy of Jerven’s book signed. 😀

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Ghana: Smooth Succession and Strong Institutions

Once described by US President Barack Obama as “a good-news story” in Africa and credited with overseeing Ghana’s emergence as one of Africa’s newest oil producers, the sudden and untimely death of late Ghanaian President John Evans Atta Mills in the early afternoon of Tuesday July 24 shocked the world. What was more incredible was the smooth power succession just a few hours later as Vice President John Dramani Mahama became head of state, devoid of any political crisis.

This smooth transition of power is a testament to Ghana’s steady march towards consolidation of its democracy, within a turbulent West African region with trouble spots like Mali, Guinea Bissau and the insecurity that has beleaguered its giant-of-Africa neighbor, Nigeria. Importantly, when comparisons are made with the succession crisis in Nigeria with late President Umaru Musa Yar’adua, how both situations were handled tested the maturity and development of democratic institutions with profound effects on political stability and social cohesion in both cases.

Atta Mills’ health, much like that of late Umaru Yar’adua had been the subject of much speculation since his ascension to the Presidency in 2008. Rumored to have cancer, false rumours of his death were rife on several occasions, debunked sometimes by Mills himself. His health progressively deteriorated leading opposition politicians and the media to question his ability to govern effectively.

Like Mills late Yar’adua’s ill health, a chronic kidney condition was an open secret and a subject of intense speculation. Wild rumors of his death made the rounds severally and like Mills, his frail health degenerated visibly and rapidly with reports that he could only attend to official duties for about 4hrs per day before his sad demise in May 2010.

In both cases, the Heads of States were encouraged by their handlers, the very group who hoarded information about their health, to continue running the country or running for second terms, despite the toll such responsibilities took on them. Ghanaians in blogs and internet chatrooms are particularly pissed off that the details of the health and death of a much loved Atta Mills remain sketchy. Similarly, late Yar’adua’s true health status was shielded from the public by his very powerful wife and some select cabinet members generated a lot of public outcry over the needless secrecy.

This is just about where the similarities end.

In Ghana, despite the controversy and mystery that shrouded late Atta Mills’ health, at the most crucial time after his death, the constitutional prescriptions for succession were swiftly and strictly adhered to as the Vice President was immediately sworn in as president. Mills’ died at around 2:15pm local time and by 4pm, Dramani Mahama had already taken the oath of office ensuring a smooth transition of attempts to subvert the rule of law for narrow interests. At this critical point, individual interests became subordinate to the collective interest of the nation by allowing democratic institutions to function as they ought to. Former President Jerry Rawlings, a critic of Mills’ leadership style broke down in tears, and the entire country was united in grief.

Ghanaian President John Dramani Mahama, shortly after he took the oath of office on 24 July. Photo Courtesy: Deutsche Welle

In Nigeria, it was the exact opposite. Even before Yar’adua passed away, as his health deteriorated, the rule of law was subverted severally by his inner circle. Where power should have been handed over to the then Vice President Goodluck Jonathan to run the country since the President was incapacitated and was abroad for several months for medical treatment, the opposite was the case. The brewing succession crisis was not made any easier by inadequate provisions in the Nigerian constitution for such a situation which those who drafted it apparently did not envisage. The vacuum created led to a power tussle, embroiling and traumatizing the country in a constitutional crisis that threatened to tear it apart.

So, why was it easy for Ghanaians to have a crisis-free succession while a similar scenario in Nigeria in 2010 nearly plunged the country into severe political instability?

This has to do with the strength and maturity of the democratic institutions in both countries. Though Ghana as a fledgling African democracy has its fair share of problems; its political elite with various interests to serve and protect, however, at such a critical moment, the competing interests recognized the need to subordinate their various interests to that of the collective whole, and allowed the institutions to function as they were meant to, for national unity. Faith in institutions by the political elite and power brokers is the life essence of political institutions that makes them function effectively.

By contrast in Nigeria, during the Yar’adua health saga as with many trying periods in the nation’s history right from independence, when collective interest should be substituted for the individual, the opposite was the case. There were strategic alliances, alignments and re-alignments by various power brokers whose interests trumped that of the collective. It was only when the impending political stability threatening to plunge the country into absolute chaos was imminent that that the rule of law was grudgingly observed, after severe damage had been inflicted.

Nigeria’s succession crisis in 2010 betrayed the weakness of democratic and political institutions to aggregate and supersede various narrow interests in times of national crises. It also shows how the political elite in Nigeria actually have little faith in such institutions to protect their interests in such trying times, such that they feel their best bet is to retreat to individual, narrow, or primordial loyalties which would serve them better, yet battering and bruising an already fragile nationhood in the process.

While having strong reform-minded people with foresight heading institutions is what builds institutions, it is faith in the ability of these institutions by the political elite that actually breathes life into them. Strong political institutions count increasingly for many African countries on their march towards democratic consolidation, and of course with such gains, Ghana continues to be one of the beacons of functional democracies on the continent.