GDP doesn’t adequately translate to economic well-being in sub-Saharan Africa
The Boston Consulting Group (BCG) has released the latest edition of its Sustainable Economic Development Assessment (SEDA) scores for countries across the globe, and the results for Africa remain consistent with last year but continue to be mildly surprising, as Nigeria remains at the bottom despite being the largest economy on the continent.
BCG’s SEDA scores periodically invoke the well-threshed-out debate around GDP as an indicator of a country’s economic situation. Critics of the metric have essentially argued that it is a blanket assessment that hides individual inequalities, given that a majority of the GDP in developing countries is often contributed by a small group of wealthy businesses.
Mechanisms such as income per capita and the United Nations Human Development Index are some examples of efforts taken in the international community to come up with a more multidimensional and truly reflective method of measuring economic prosperity. BCG has its own solution to the problem.
The SEDA is a holistic evaluation tool, developed by BCG to measure various aspects of economic stability. The consulting firm measures well-being of a country’s citizens across a set of ten indicators, which are broadly categorised into three categories, namely economics, investments, and sustainability.
In the economics dimension, for instance, the firm measures income, economic stability (inflation, etc), and employment levels. The investments dimension covers the level of access that citizens have to healthcare, education and infrastructure such as power, transport, sanitation, and technology.
The sustainability category covers the important social and environmental aspects of economic growth, such as income equality & distribution, the level of involvement amongst civil society, government effectiveness & accountability, and the quality of the environment and the protective measures therein.