Can We Trust these Inflation Figures?

Sat, 17 Jul 2010 Source: Awuni, Manasseh Azure

Finance Minister, Mr. Kwabena Dufuor, must be a happy man. And as my fingers dance mischievously on my keyboard, I can picture the former Governor of the Bank of Ghana standing before President Mills, grinning from ear to ear.

“I told you so. I told you we’ll prove our detractors wrong,” he says.

“Ayekoo, Kwabena,” the soft spoken professor would extend a hand. “I can assure you that your ears shall hear about ministerial reshuffle, but your eyes will never see it until 2017 when we leave it for them.”

I’m not Paul the prophetic, psychic octopus but the line of argument which will follow in the next few days about the 9.4% “single-digit” inflation will be as predictable as the ritual journey of the Sun from the east to the west. Clichés such as “prudent economic management” and the “better Ghana agenda” will again resurrect and fill the airwaves when the NDC’s social commentators enter the radio and television studios. Their opponents, the NPP, who almost composed a song on falling inflation figures during the last election, are going to ask the question I’ve always asked anytime I hear about the imaginary stuff called inflation: Do we eat falling inflation figures?

Since the days I was not old enough to impregnate a woman up to today that I’m old enough to own one, I have never had faith in inflation figures. I call them imaginary figures. That’s not to say I hate economics. In fact, anybody who cares can go to Krachi Senior High School and ask Mr. Nuworza and Mr. Peter Alowordor, my Economics tutors. But anybody attempting such an adventurer should first book an appointment with Dr. Marcus Manns of the Chiropractic and Wellness Centres to have his or her spine adjusted afterwards. The road network is indescribably terrible.

In fact if I was given anything short of grade “A” in Economics at the SSSCE, I could have called for remarking. But I still doubt inflation figures because of how we have come to make rank nonsense of such economic indicators in recent times.

Let me take you to this country where the last but one hero of Africa last reigns. I mean Zimbabwe. You may not agree with me when I say Robert [Angel] Gabriel Mugabe is a hero. But the question of a hero or demon is a matter of subjectivity. You’re either a freedom fighter or a terrorist based on the media organization that is reporting your story. And it is interesting to note that until 2008, our saintly Rolihlahla Nelson Dalibunga Madiba Mandela was still considered a terrorist in the USA. I mean Nelson Mandela was on America’s terror watch list. Yes! Madiba the “terrorist” needed a special waiver before he could enter the sacred “Land of Freedom.”

I will come to that subject when I grow up, but what I just want to say is simple. Such things are as subjective and open to different interpretations as inflation figures. On August 19, 2008, the CNN reported that Zimbabwe’s inflation had hit a record of 11, 200,000% If you can’t pronounce it, let me help you. That’s Eleven Million, two hundred thousand percent! Incredibly incredible! But that was not the end.

The figures kept souring with the speed of a spacecraft. Then on October 9, 2008, the BBC reported the rate of Zimbabwe’s inflation to be 231,000,000% (two hundred and thirty-one million percent). The BBC, VOA and CNN made sure that there would not be a news bulleting without the “deteriorating” story of Zimbabwe.

Then in February 2009, something dramatic happened. Mugabe and his implacable “Friend of the West” agreed to form a unity government after years of bitter encounters and breaking of skulls. What happened later was even more dramatic. The Zimbabwe inflation situation was no longer heard in the Western media and I wondered what at all the so-called Western and professional media wanted to achieve. But the real shocker was later to hit me when I picked up the June 2009, edition of my favourite Pan-African magazine, the New African.

“It’s Good News, Says Tsvangirai,” was how the story was captioned. It was an interview the New African had with the new Prime Minister of Zimbabwe, Morgan Tsvangirai, probably in May for the June edition. Remember Morgan Tsvangirai was among those shouting loudest about the rising inflation figures. Now hear him.

“Question: What progress has the unity government made so far?”

“Answer: It is a positive development. We are very satisfied with the performance of the government. There have been incremental gains – we have reopened schools, we have reopened hospitals we have reduced inflation to almost 3% ….” Yes! From 231,000,000% to single 3% in three months.

Do Zimbabweans have magicians as economists? No! When it comes to inflation figures I usually doubt. And before you take me on, remember that these days economic indicators have become more of literary fiction than factual presentation of the situation on the ground.

Very recently the Forbes Magazine, reputed for its credibility in many aspects of American and international spheres, came out with some “kangaroo rankings of world economies.” It cited Ghana as the 9th worst managed economy in the world. And for the first time, Ghanaians rubbished what Dr. Nii Moi Thompson calls the “Demean and conquer” tactics. His insightful article and the one by IMANI Centre we enough to support the finance ministry’s call on all to treat that rubbish with the contempt it deserved.

But had Forbes Magazine ranked Ghana among the Best Ten Managed Economies in the world with those same flawed barometers, what would the reaction be? Would the NDC not uphold it and use it as a cardinal point in their campaign message come 2012?

Well, to me, these figures are imaginary and subject to countless interpretations, with each one being correct.

But it appears our single-digit inflation may have some element of truth in it. I don’t know the extent to which it is accurate, but I can give a testimony (in church) to support it. If I have not taken note the rate of price increment of commodities at all, I don’t remember the last time “trotro” fares were increased. After a long time I was pleasantly surprised when I had to pay the same fare I paid to board a vehicle to Kete-Krachi from Accra.

Indeed, I’m not against economic indicators and I don’t totally disagree with the veracity of the figures. But I’m only warning against our tendency to behave as though every bit of our progress depends on inflation figures. After all, who eats single-digit inflation figures?

Though these figures may mean a lot to some people, especially the business community, it means nothing to the thousands of human beasts of burden from northern Ghana whose lives, apart from the nice cars they help load people’s shopping into, are not any advanced that the hunting and gathering stage of human existence. It means almost nothing to the thousands of energetic young men who line up the streets daily to roast under the merciless and blistering African sun, selling whatever has a name.

To some, the fall or rise of inflation figures do not mean anything and instead of spending the rest of our energies conducting pre-arranged media interviews and paid for bulletins, let us focus on wealth creation. I hate to hear poverty alleviation because we can never alleviate poverty when we don’t create wealth.

Investment should be channeled into the agric sector and storage facilities should be made available to reduce post harvest losses. To many Ghanaians, abundance of food is all that is needed to make life worth living. To many households in the country, two good meals a day can be too luxurious to afford.

To such people, inflation figures mean practically nothing to them. We don’t eat inflation figures.

Those figures can be true or false and positive or negative based on who is tabulating or interpreting them. So after the little, noise let’s pause and ponder. What’s next after the single digit?

After all, it is not extraordinary! Zimbabwe achieved it last year! It is employment figures that really matter.

That is if they are genuine!

Credit: Manasseh Azure Awuni [www.maxighana.com] azureachebe2@yahoo.com The writer is a freelance journalist based in Accra, Ghana. To read more of his writing, visit www.maxighana.com

Columnist: Awuni, Manasseh Azure