a Mark Magazine: Africa Dispatches feature Accurate research can change the economic fortunes of entire countries. Just ask Nigeria. Mandy de Waal (@mandyldewaal) sorts the good numbers from the bad.
South Africa was once the king of Africa, and bore the title: ‘The Country With The Largest Economy in Africa’. No longer. The new king is Nigeria.
SA was Africa’s biggest economy with a gross domestic product (GDP) of about US$384 billion in 2012. By comparison, the most populous country on the continent, Nigeria, had a GDP of just US262 billion.
“The new GDP number for Nigeria was released today. It is 80.3 trillion naira [5.125 trillion South African Rand] for 2013,” writes Morten Jerven, economic historian and author of Poor Numbers: how we are misled by African development statistics and what to do about it. “Nigeria overtakes South Africa,” Jerven states.
GDP — the monetary value of a country’s goods and services — is globally recognised as a means of economic ranking. Nigeria, unfortunately, was tracking its GDP using a base year for national accounts that was horribly outdated. A revision yielded new figures, and saw SA topple off the top spot of the continent’s economic rankings.
“Does it seem to you that the Nigerian economy suddenly is growing faster?” asks Jerven, who answers his question by saying that, using the old figures, the country’s growth was 10, eight and four percent in 2011, 2012 and 2013 respectively. “On the new series we have 17, 13 and 12 percent growth for the same years.” The difference between 10 and 17 percent for investors is massive. The big lesson here is how poor numbers hamstring a country.
Jerven’s study of the production and use of African economic development statistics reveals how patchy the continent’s economic data is, and how crucial it is that this changes. The reason for these numbers being poor, says Jerven, is not just one of technical accuracy but also because the “arbitrariness of the quantification process produces observations with very large errors and levels of uncertainty”.
Poor numbers don’t only bedevil economic data but have a ripple effect through marketing, media and brand research as well. SA has a census every 10 years, but the undercounts are large by global comparison, says Paul Haupt, who in April 2014 became the first-ever executive director of the Pan African Media Research Organisation (PAMRO).
“Global undercounts are set at between two percent or three percent, so there’s a 98 percent accuracy,” he says, adding: “In SA, the undercount is about 14 percent.” The starting point for media and other marketing research is the census, and a lack of data is often driven by a lack of money. The Catch-22 is that good numbers bring more money.
“The major problem we see in many parts of the continent is that very little money is available for research,” says Haupt. “If people don’t believe data, it is incredibly difficult to get them to commit.”
“Media research only came to most of Africa quite late. If you look at the roll-out of studies like Amps across Africa, it only started with Zimbabwe in the ’90s, then rolled out across Ghana and Kenya,” Haupt explains. “For both investors and brands, countries need research that’s credible. When it comes to information transparency, good governance is everything,” he says.
According to Haupt, SA, Nigeria, Kenya and Ghana are among the continental hotspots with the better data. It should come as no surprise that these regions are doing well economically.
This feature first ran in Mark Magazine: Africa Dispatches — the sister print magazine of marklives.com. Sample or buy the launch issue of Mark: Africa Dispatches #1 here.
Mandy de Waal. Curious scribbler. Born-again atheist. Author on training wheels. Thought activist. Amateur human. Collector of stories. Lover of the long form. Consulting editor to MarkLives.com. Editor of Mark Magazine: Africa Dispatches.
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