An associate Professor at the University of Ghana Business School, Patrick Opoku Assuming, has condemned Ghana’s over-reliance on macro-data in determining growth in the country.
He says the country’s failure to segregate the various sectors of the economy in determining how each is growing is the reason Ghana has seen some growth for some time now, but is not reflecting in the lives of the citizenry.
According to him, despite the fall in inflation for instance, from 54 per cent in December 2022 to the 21 per cent the country is having now, the cost of living within the same period shot up by 43 per cent.
This, he says, is the reason the positive shift of the economy on paper is not reflecting in the lives of the people.
Speaking on Ghana Tonight on TV3 Thursday, October 24, 2024, he said the best the nation could do would be to disaggregate the figures to come out with the specifics to understand their overall impact on the economy.
An analysis of the respective sectors that have seen improvements over the period, according to Prof. Assuming, is the reason people are suffering despite the figures telling a positive story.
“One of the problems is the over-reliance on macro-data without doing a little more disaggregation to understand what is behind the numbers. For instance, one of the things you hear is that since inflation peaked at 54% in December 2022, it has fallen continuously to about 21% or so. That is true but even in that period, the cost of living has risen upward to 43%. Even if you just count from the end of 2022 alone where inflation has come down.
“So, sometimes, when you rely on the numbers and you don’t look too much into the disaggregation you’ll get it wrong,” he stated.
Aside from the inflation figures, he also talked about the growth rate which has been in its best form since the pre-covid era, but not having any reflection on the lives of people.
“Then the other one is the growth rate which in the first half of the year has exceeded expectations. It is true that the growth rate we’ve seen, especially in the second quarter, is the highest we’ve seen over five years, that would be the pre-covid era but one of the things is to look at disaggregation and primary data,” he stated.
He indicated that the mining sector has seen the biggest growth within the period in question as well as ICT, explaining the two sectors obviously have no direct correlation with the lives of the masses, contributing to the reason Ghana is doing well on paper but worse in reality.
“So, when you disaggregate the source of the growth, you see for instance, especially for this year, mining has been the strongest source of growth followed by ICT and construction. Now, the question you ask yourself is, if the economy is growing more than expected, why is it that Ghanaians don’t seem to relate to whatever the macro number is saying?
“One of the reasons is, when you begin to disaggregate the growth, and you see which sectors are growing, then you understand why in spite of whatever growth you’re seeing, Ghanaians seem to feel completely different,” he explained.
His comments come on the back of a Global InfoAnalytics poll on the 2024 elections where the economy is influencing the most part of the conversation at the expense of the government despite the positive figures showing in the books.
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