The Weah-Sirleaf Debate over GDP: Who’s Saying What?

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President Weah (left) asked why former President Sirleaf (right), who professes to be knowledgeable about GDP, did not use the knowledge to get things right in Liberia.

There has been much talk as to whether President George Weah knows anything about Liberia’s present Gross Domestic Product (GDP) and how it affects the country’s overall economy and as to whether the allegation about a ‘missing’ L$16 billion may have any effect in the long run.

Reacting to political developments on the home front during his absence from the country, President Weah, speaking at the intercessory service held in his honor at the Dominion Christian Church upon his arrival home on Sunday, September 30, President castigated the statement by former President Ellen Johnson Sirleaf, when she suggested in an earlier BBC interview that the government under his leadership, might not understand what the country’s GDP is.

President Weah responded by asking why President Sirleaf, who is knowledgeable about GDP, did not use the knowledge to get things right in Liberia. “They know GDP,” said Weah in apparent derision, “They were in power for twelve years but could not fix the country.” According to political observers, President Weah’s rhetorical question simply underscores the fact that GDP could be a misleading indicator of the actual wellbeing of the people as compared to the Human Development Index. It could also, according to analysts, conceal real per capita income and present a somehow rosy but inaccurate picture of a country’s economic health.

For example, according to economic observers, Liberia during the 1960s recorded very high rates of growth and high GDP but, in reality, little or no development was achieved as the vast majority of the population remained mired in abject poverty. During the reign of President Sirleaf, Liberia attracted very high volume of direct foreign investment amounting to more than US$15 billion but, by contrast, economic conditions either deteriorated or remained the same with increasing numbers of Liberians falling below the poverty line-living on less than US$2 per day.

To determine actual wellbeing of the people, economists and social scientists tend to use the Human Development Index (HDI) to measure well-being within the country. The HDI is mainly a social measurement tool because it takes into account factors such as education measured in terms of the adult literacy rate, years of schooling, health care, life expectancy and also the economic factor of GDP.

History of GDP

GDP stands for Gross Domestic Product and its history can be traced to economist Simon Kuznets who developed the measurement (GDP) during the early 1930s. GDP measures the size of the economy by adding up the value of goods and services produced in the country during a period of time. Using the Expenditure approach, GDP is equal to Consumption + Gross Investment +Government Spending +(exports – Imports) expressed mathematically as GDP = C + I + G + (X-M).

According to Luke Metcalfe of Nation Master, most countries use GDP to measure standard of living. Economists, policymakers, international development agencies and even the media use it as an indicator of the economic health of a nation. The advantages offered by GDP is that it is widely and frequently used and its data requirements are readily available. Since the definition is common among countries, consistent comparisons can be made between and among them.

But there are limitations and disadvantages of GDP according to Metcalfe. For example, certain activities that have a negative impact on the people’s well-being could end up being recorded as positive contributions to the GDP. For instance, rising criminal activities can increase the country’s GDP through greater expenditures toward maintaining law and order (e.g., hiring of additional police officers, purchase of guns, building of prisons, etc).

Another example is the consequence of having depleted forests because of logging activities. GDP is increased when trees are cut down for lumber and other uses. The negative impact of deforestation is not taken into consideration. GDP is also criticized because it does not take into consideration other aspects that define human well-being like life expectancy and educational attainment.

According to Countryeconomy.com Liberia’s Gross Domestic Product (GDP) grew by 2.5% in 2017 compared to last year. This rate is 41 -tenths of one percent higher than the figure of -1.6% published in 2016. The GDP figure in 2017 was $2,158 million. Liberia, the report said is number 170 in the ranking of GDP of the 196 countries. The absolute value of GDP in Liberia dropped $1,120 million with respect to 2016.

The GDP per capita of Liberia in 2017 was $456, $254 less than in 2016 when it was $710. To view the evolution of the GDP per capita, it is interesting to look at 2007 when the Liberia’s GDP per capita was $400. The above indicates that Liberia’s population is among the poorest of the 196 countries whose GDP are published by countryeconomy.com.

Additionally, Liberia’s national debt in 2016 was U$928 million, (28.3% debt-to-GDP ratio) and its public debt per capita is 201$ dollars per inhabitant, according to Countryeconomy.com.

Compared to Sierra Leone, its Gross Domestic Product grew 4.2% in 2017 compared to 2016. This rate is 21 -tenths of one percent less than the figure of 6.3% published in 2016. The GDP figure in 2017 was $3,774 million, Sierra Leone is number 160 in the ranking of GDP of the 196 countries that we publish. The absolute value of GDP in Sierra Leone dropped $11 million with respect to 2016.

The GDP per capita of Sierra Leone in 2017 was $499, $23 less than in 2016, when it was $522. To view the evolution of the GDP per capita, it is interesting to look back a few years and compare these data with those of 2007 when the GDP per capita in Sierra Leone was $369.

If we order the countries according to their GDP per capita, Sierra Leone is in 185th position. According to this parameter, its population is among the poorest of 196 countries worldwide.

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5 COMMENTS

  1. If some journalists continue riding inside a $16 billion container, those officials who didn’t find out whether there was any truth to a fantastical story before speaking in tongues enabled them. It’s like accusing someone and pushing burden of proof onto the accuse under the guise of accountability. One can just imagine what poor E.J Roye underwent when maligned, manhandled, and murdered by a previous elite only interested in perpetuating themselves in power.

  2. Sylvester, there was truth surrounding the issue of money in question. The Information Minister spoke about it on international media. The Justice Minister confirmed that they were doing an investigation. The finance minister gave a different version of things. The government even invited the IMF, ECOWAS, AU, FBI, and other international partners to come and aid in the investigation. Then after a long silence, the president, before leaving the the just-ended UNGA confirmed that an investigation into the issue of the missing money was-ongoing and those responsible would face the full weight of the law. What more did you want journalists to do when they were just reporting information given to them by the government? I think this president should be very careful with the people around him. Because if he has good intentions, I’m afraid, he doesn’t seem to be in charge.

    • Momolu,
      Sylvester Moses and his cousin Dortu Sieboe Doe will defend the George Weah Government on ANYTHING. I Mean ANYTHING. If it were possible for Weah to declare himself President for life and change his title to Emperor, these two guys will find a way to justify it.They are beyond ridiculous.

  3. Stop trying to change the subject concerning the alleged stolen or missing money by creating a new political narrative for debate about the GDP war of words between the major suspects, Ellen Johnson Sirleaf and George Weah. We are more interested in the stolen money now because lies were why political reform and infrastructure developments could not take place. Ellen brought about a fake decentralization by building administrative centers for marriage certificates and license plates in few counties calling it decentralization . And George Weah came in immediately started building personal mansions while informing the public that the newly regime was left without money and was broke to start with any major infrastructure developments . But in the meantime , the both governments were sitting on the people’s money of 16 billion Liberian dollars or one hundred and four million US dollars and lying to the citizens why political reform concerning decentralization and elections of local leaders could not be carried . Under the regime of George Weah local senate and representative elections could not take place had to be postponed because the regime said that the government was broke . No need to change the stolen 16 billion Liberian dollars question about who stole it for a silly debate concerning GDP and who is telling the truth. No need for that !

  4. The past administration was neither educated nor applications active within the knowledge of Liberian GDP in the interest of the majority of Liberians who were neither benefited by its corrupt analysis. No mind should be place of Her because she plays no part in the present calculation of this administrative GDP statistics. Attempts to be seen on media is crave to regain influence passive and past Liberians have no more interest in to maybe shadow involvement. The CBL has already determined this and awaits the removal of those within bank limits implicated after present executive actions. She needs to stay out of interruptions to the Government’s operative activities or be investigated for under minding. Liberia’s GDP has nothing right now to do with what the Liberian nation has in its vault. You have served your term already. So the silent majority says at 80 close, get out, or face being interrogated for malpractice.
    In simple Liberian Language, do not answer me. Talk to the Liberian people.
    Gone to silent majority.

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