The European Business Council for Africa

This week’s editorial comes in the form of our new podcast, which looks at the problem of reading too much into gross domestic product (GDP) figures.

This comes as the African Development Bank warns that Africa’s growth could contract by 3.4% in 2020 due to the virus pandemic. At first glance this sounds like a drastic change in fortunes from the days of 5% average growth across the continent in recent years, driven by high commodity prices and booming investment.

Yet a more nuanced look quickly demonstrates the limits of GDP data in assessing a country’s economic and development prospects, which can actually distort or even misrepresent key indicators.

Despite this GDP statistics are the go-to for economic analysis, often used as the primary indicator of where a country is heading.

The Nurmara team looks at the problems of relying too heavily on GDP data, why this happens, and what some better alternatives might be.

You can listen to the full discussion, which also includes our take on other interesting stories doing the rounds, on Spotify or Apple Podcasts, or by clicking the image below.

Read the full article here.