Hard times

Surveys conducted from 2007 through 2010 by The Gallup Organization have found that Sub-Saharan Africans perceive their living conditions to have deteriorated considerably in the last few years. In 2007 those who said they were “finding it very difficult” to live on their present household income made up a median of 22% of participants across all countries surveyed — this number rose to 36% in 2010. “The median of 16% who reported ‘getting by on present income’ in 2010 is nearly half of what it was in 2007.” This is happening even as GDP growth rates across much of the subcontinent have remained relatively high through the global economic downturn.

Participants were asked to chose 1 of the 4 options as an answer to the following question:

Which one of these phrases comes closest to your own feelings about your household’s income these days?
| Living comfortably on present income
| Getting by  on present income
| Finding it difficult on present income
| Finding it very difficult on present income

Ghanaians perceived some of the worst reported deterioration in living standards among the countries surveyed. The table below brings together the data from Ghana.

 

Year

Living comfortably on present income Getting by on present income Finding it difficult on present income Finding it very difficult on present income

2007

20% 30% 31% 11%

2008

11% 27% 35% 18%

2009

10% 15% 44% 29%

2010

4% 20% 41% 34%

Above data in graph form:

Reported living conditions in Ghana

From 1 in 10 people in 2007, Ghanaians who reported “finding it very difficult” rose to one-third of participants in 2010. Those who reported “living comfortably” fell from 1 in 5 in 2007 to only 1 in 20 in 2010.

Of course, the general responsibility for the decline in living standards lies with the usual suspects: the recent global economic downturn caused by the US housing bubble, the 2003-2008 oil price hikes, and the 2007-2008 food crisis.

But why have Ghanaians fared worse than most of the rest?  What’s special about Ghana that perhaps makes it comparatively more susceptible to external shocks? Is it possible that Ghana suffered from internal shocks in the last few years as well? Or could it just be that since in comparison to the rest of Sub-Saharan Africa, Ghanaians started off in 2007 thinking they were doing alright, and now that there’s a pinch they just feel a lot worse about it than most others?

I would go into answering the above questions myself (and I might still do so at a later time), but I’m told I have to keep my posts short because people on the internet have short attention spans. And also, I’ve been told that I have to try to encourage discussion on my blog. So discuss, please.

Advertisements

5 responses to “Hard times

  • Sylvie Spraakman

    Hey Umair!
    Before I comment, I have to say that not everyone likes ‘short’ blog posts. Maybe you could do like a summary section for lazy readers? Or maybe do a long follow up blog post after generating discussion? Just suggestions anyhow…

    But in the spirit of ‘generating discussion’ – here are some of the things I thought of after reading this post…

    Does it have to do with the push towards cash crops and away from subsistence farming? Maybe development organizations have it wrong – or have it wrong in a small way. Maybe Ghana’s agriculture exports are not varied enough, and prices went down on all their exports during the recession. Maybe farmers were better off with the subsistence model – because then when the weather is decent, their family eats. The weather can’t be bad every year, can it? Or else why would people have lived there for thousands of years? It could be that with more dependence on the same type of crops and less land being used for food, that in bad economic years farmers lose out. And then if there’s a year with bad weather, farmers also lose out – on food & cash. Hmm. Maybe I’m way off though… and maybe it’s just because Ghana’s overall economy is too focused on agriculture. Or it could be that world food prices are rising and Ghanaians are feeling that pinch.

    Numerous theories… I’d like to read more about what other people think too

    • Umair

      Cool. Thanks for the feedback. It probably makes sense to not worry about keeping posts short just because interneters are said to be lazy. I really did think this would be a good way to encourage discussion, though. It looks like I wasn’t exactly right about that, so I’ll have to tinker with it and see.

      And thanks for tackling the discussion questions. You’ve definitely hit on some things there. Ghana has developed an export-oriented economy based on primary commodities like cocoa and gold. And focusing efforts to forward that end, it hasn’t been able to achieve food self-sufficiency. Staples like wheat and rice are imported, even though a huge part of the population is employed in the agricultural sector.

      Given that it can’t feed itself, when food prices rise, like they did in 2007-2008 and are doing again now, the Ghana doesn’t have many tools to work with to make things better for people. (Russia, for example, recently put in place export restrictions on wheat to drive down domestic prices…… this is probably going to increase global prices further… sucks to be Ghana).

      According to ODI, unlike the last food crisis, the current food price increase is being accompanied by an increase in the price of other agricultural commodities such as cocoa. And the Ghanaian economy actually stands to gain from the price rises — the higher profits it will get from cocoa will be larger than the increased cost of food imports. I doubt, though, that this fact will be of much help to the urban poor, those most vulnerable to food price hikes.

      … and that’s my added commentary to your post.

  • erinantcliffe

    Haha who told you that you had to do all this stuff Umair? Your blog is your own, do with it what you want 🙂

    Anyway, I welcome the discussion and can’t wait to see you in Ghana in a few short months!!

  • Umair

    Alright, I’ll do it. I’ll answer one of the questions quickly.

    Along with external shocks like the global recession, and energy and food price hikes, Ghana has had some internal shocks to deal with in the last few years which would help to explain why Ghanaians perceive a larger drop in their living conditions compared to other Sub-Saharan Africans.

    One of the internal shocks Ghana has seen in recent years is drought, which not only led to lower agricultural output but also lower water levels. Since a whole lot of Ghana’s energy comes from hydropower, lower water levels are not so good. To compensate for the energy shortage, Ghana had to import more oil than usual. Doing that when oil prices were insanely high was, again, not so good. Trying to deal with all the problems caused by what was happening inside as well as outside the country left the government with a $3.5 billion (about 20% of Ghana’s GDP) fiscal deficit in 2008.

    The government’s ability to deal with the ongoing hardship has been at a low point exactly when ideally the opposite should have been the case.

    Yeah.

    There are still other things that could be talked about. Other internal/external shocks leading up specifically to the current situation, as well as broader historical structural problems of the kind that Sylvie mentioned in her comment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: