Book chapter

The Problems of Economic Data in Africa (2019)

in: Oxford Research Encyclopedia of Politics

Abstract

The study of economic development in African countries is facing a basic problem of lack of reliable data and statistics. These problems of economic data are best addressed under three main categories: design, capacity, and politics. The focus is on gross domestic product (GDP), but the relevance goes beyond GDP statistics because the aggregate of GDP requires economic data on all sectors of the economy, including expenditures and consumption, which gives the basis for discussing levels and trends in monetary poverty as well as having a correct count of the total population. The problem of design refers to the fact that many, if not most, of the statistical categories that are in use in international organizations disseminating statistics on social and economic affairs are categories that were designed as appropriate for developed countries. Indicators such as "unemployment" work better in a formalized labor market. The problems of design translate into problems of capacity. Because most economic transactions are not recorded in informal economies, this means that they are not reported as a rule and that therefore such recordings require a lot more resources. Many statistics that are readily available from administrative sources in higher-income countries need to be collected in more expensive surveys in low-income countries. Budgets for official services may already be constrained, and thus resources for statistical offices to collect these data are less than the resources needed to do so. Finally, politics of data matter. When statistics are based on missing data, the estimates will invariably be soft, and therefore malleable. Thus, when incentives are clearly identifiable before reporting or aggregation, the final estimates may be biased.