The political meaning of numbers
Ghana’s inflation has dropped to 3.8 per cent as per the Ghana Statistical Service’s release last Wednesday.
In a conversation with a good friend, I was asked why prices of goods and services on the market are not declining if, indeed, inflation is declining.
I am not an economist and therefore cannot explain all the intricacies of inflation and how it corresponds or does not to other economic measures, as well as the everyday market experiences of the ordinary Ghanaian.
However, I know that globally, there are certain acceptable indicators for measuring the health of a country’s economy, and inflation is one of them.
I won’t be wrong to say an inflation rate of 3.8 per cent is a positive indication of the health of a country’s economy compared to some other higher number.
So why do such positive indications of the health of a country’s economy become the subject of partisan discourse?
Measuring inflation
As previously mentioned, there are ways of measuring the health of a country’s economy.
These ways are not unique to Ghana, and neither are the methods. In addition, there are globally accepted practices associated with generating these measures.
Granted, countries may occasionally revisit their methodological approach, but they must still be in conformity with these standards.
For example, calculating inflationary rates requires generating what economists call a basket of goods and services and collecting price data over several markets in each country.
Over the years, Ghana has expanded this “basket” to include more items, but note that the items in a “basket” are designed to capture as many as possible of the commonly consumed items across a given population.
Also, not everyone consumes all items in the “basket.”
A public figure once challenged the inflation number by picking out an item, such as grapes and asked, “How many people eat grapes in Ghana?”
They contended that the inclusion of items not commonly consumed by the majority of the population misrepresents the inflation rate.
If I were to create my “individual basket”, it would be different from my neighbour’s, even though we may share some similarities.
The national picture is simply an aggregation of what occurs at the individual level – be it the items or the markets from where the price data is generated.
The political meaning of inflation
Numbers are designed to be a more “objective” way of capturing reality. I often argue that in a politically competitive system of government, inflation or other objective measures of the health of an economy have political meaning.
What do I mean by that?
When economic indicators go south, an incumbent government takes the heat for it, mainly driven by the main opposition.
If you recall, when inflation was 54 per cent, the narrative about the past government was not very positive.
But before the runaway phenomenon, between 2018 and 2021, inflation remained low, never rising beyond 10 per cent.
When reference is made to past inflation, there are two responses from those on the NPP side of the political aisle: a) the pre-COVID period; and b) the steady decline from 54 per cent to 22 per cent.
When economic indicators are very positive, an incumbent takes credit, and rightly so, for it.
After all, if at a 54 per cent inflation rate, the government gets blamed for its actions or inaction, then at 3.8 per cent, it would seem logical to me to credit it to the actions or inaction of the government.
But partisan politics sometimes does not flow in neat sequences.
This means while an incumbent touts positive economic indicators like a 3.8 per cent inflation rate, the opposition party strives to create an alternative narrative that tries to take credit away from the government.
In all of this is the ordinary Ghanaian who, in the middle of the partisan fight over who gets credit or not for a 3.8 per cent inflation rate, has only one concern – how does it translate into their everyday economic reality.
If the ordinary Ghanaian, who is a voter, feels a change in their economic reality, their natural disposition will be to politically reward those in power who are managing their economy.
Between an incumbent government, a main opposition political party, and the ordinary Ghanaian who votes, the political dynamics of numbers such as the current rate of inflation are interesting to observe.
Beyond politics
In the political conversations and debates, though, it must not be lost on us that there is something bigger than our political interests.
First, the benefits of a healthy economy do not discriminate by party colours.
Second, and most importantly, we must endeavour not to let our rhetoric appear to be calling the integrity of institutions such as the Ghana Statistical Service (GSS) into question.
Imperfect as they may be, anyone who has closely followed them will agree with me that over the last ten years, their work deserves our utmost commendation.
The writer is Project Director, Democracy Project
