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Business News of Wednesday, 8 June 2016

Source: Myjoyonline.com

IMF report: Stop the noise, abuse of statistics - ISSER tells gov't

The head of the Institute of Statistical Social and Economic Research (ISSER) says government should not make noise over the latest IMF report which suggests an improved Ghanaian economy.

Prof Peter Quartey says the improvement, if anything, is only marginal and Ghana could have done better especially with its oil resources.

The Economist also chided government for "abusing statistics" by picking two economic figures within two different periods and making its own conclusions.

"Looking at the periods concerned, 2008 and 2015, you pick two data points and you key the number of years in between and make statements. I think we should be careful otherwise we abuse statistics," he said on Joy FM's Newsnite programme.

His comments are in reaction to a report by the IMF which suggest a positive growth outlook in the economy.

The government on receiving the report by the IMF quickly issued a 12-page statement trumpeting the economic, social achievements by government.

The statement captured part of the IMF report which puts Ghana’s GDP per capita in current terms in the year 2015 at US$1,340.4.This represents 5.9% increase over the 2008 figure of US$1,266.1.

"Our current per capita income is also higher than that of Cote d’Ivoire (US$1,314.7), Senegal (US$913.0) and Kenya (US$1,338.5)," the statement said.

The per capita income is the amount each Ghanaian should receive if the GDP were to be divided amongst everybody.

The statement also pointed out that Ghana has achieved the Millennium Development Goal 1 target of reducing the proportion of poor people by half by 2015 in 2013- a clear two years ahead of the deadline. A recent World Bank study, “Poverty Reduction in Ghana: Progress and Challenges” supports this.

In a reaction the ISSER boss admitted the figures, on the face of it, do not show a retrogression but was quick to point that Ghana could have done far better.

He said between 2008 and 2015 a period of eight years, Ghana has only managed an increment of $72 on its per capita income. So on the annualized basis we are adding $9 on the average, he pointed out.

"It is good we are not retrogressing that our GDP per capita is increasing but let's not make too much noise about the marginal improvement," he said.

Rather than jubilating over this marginal increase, Prof Quartey said Ghana should rather be comparing herself with the African average of the per capita income. The African average is $1,600, and Ghana is $300 short of the African average.

"When we are comparing, and you find people pick and choose countries, that does not help us. Let us rather compare ourselves with [African] the average. If we are above average then we can go out there and commend ourselves," he said.

"We have found oil, an additional source of revenue, and so we should be doing better than we are doing now," he said.

Inequality

The Economist also raised the issue of inequality in the face of the marginal increase in the per capita income.

According to him, the rich are becoming richer and the poor, becoming poorer.

"Although our per capita income has increased, inequality has worsened. If you look at the Ghana Living standards survey report, inequality has worsened. The rich are becoming richer and the poor are becoming poorer and that is why many people say they don't fill in their pockets," he said.

He charged government to implement conscious policies to redistribute growth, wealth and close the gap between the rich and poor.