Some economists have called on governments to de-emphasize the role of Gross Domestic Product (GDP) as a means of economic wellbeing of the country and focus on the real well being of the people.
“It is important that the managers of the economy shift focus and ensure that the well being of the people becomes paramount instead of the achievement of positive GDP figures as sole measure of economic well being,” Dr Lord Mensah, a Lecturer at the University of Ghana Business School has noted.
Dr Mensah made the call in a contribution to discussion on the theme, “The Diminishing Role of the GDP as a Measure of Economic Performance” on 3Fm’s Business Weekly Programme.
He explained that, “in an economy that dwells on a weak service sector, instead of a solid manufacturing base, the choice of GDP to generalize the health of the economy is an erroneous practice. It is important, but must not be over used.
“In advanced economies, there is a quick translation between government spending and its reflection in people’s lives. But here it takes a rather long period for this to take effect and that is why it is most prudent to focus on developing a solid manufacturing environment to create that overall boost for change in the lives of the general population.” he added.
Joseph Stigliz, an economist and one-time Senior Vice President of the World Bank, earlier this month joined Christine Largarde head of the IMF to posit that, “GDP is not a good measure of economic performance; indeed, it is not a good measure of well-being and called on economic planners to ‘forget about GDP’.
“What we measure informs what we do. And if we’re measuring the wrong thing, we’re going to do the wrong thing,” he explained.
Courage Kinglsey Martey, an economist at Databank Financial Services was upbeat about the over reliance on GDP by economic managers and planners to have a radical policy change that will push towards the Decent Standard of Living Index.
In Ghana, GDP figures over the years have been major indicators of the health and performance of the economy.
Ghana gained one of the highest GDP’s per capita in Africa owing to a GDP re-basement in 2011 and became the fastest growing economy in the world. The domestic economy in 2012 revolved around services, which represented 50% of GDP and employed 28% of the work force.
Besides industrialization associated with minerals and oil, industrial development in Ghana remains basic, often associated with plastics (such as for chairs, plastic bags, razors and pens).
Story by Gideon Asare Sackitey | 3FM Business | 3news.com