Despite its frequent use as the main measure of progress, GDP fails to account for health, happiness, inequality, and environmental sustainability. An expert panel explored how a focus on wealth could inform policymaking in Africa—and how to make the shift.
For more than 70 years, gross domestic product (GDP) has been the most frequently cited and influential indicator of national wellbeing and progress. Yet GDP narrowly focuses on short-term economic growth while ignoring the costs of this growth, including environmental degradation, loss of societal trust, mounting debt, and growing inequality.
Given these limitations, economic growth as measured by GDP has an inordinate influence on the decisions of policymakers. For example, decision making focused on GDP is biased toward short-term economic benefits, places too much emphasis on the market economy, and ignores the consequences of economic growth on other determinants of wellbeing—especially the environment and community. Measuring wealth in the broad sense—including human, natural, social, produced, and financial capital—would give countries new and important insights into the true costs and benefits—and sustainability—of their policies.
Within this context, the international Institute for Sustainable Development (IISD) hosted a seminar exploring the case for wealth as a core measure of national progress, focusing on Africa in particular. The event featured a panel discussion exploring the shortcomings of GDP, the benefits of using expanded wealth measures to guide decision making, and the steps necessary for countries to embrace this new approach to ensure sustainable development.
The list of speakers included: Njuguna Ndung’u, Executive Director, African Economic Research Consortium; Jim Cust, World Bank; Kevin Urama, African Development Bank; Jane Mariara, Executive Director, Partnership for Economic Policy; and Lebohang Liepollo Pheko, Wellbeing Economy Alliance (WEAll) Ambassador.
The event, funded by the International Development Research Centre (IDRC) of Canada, took place on Tuesday, 26 April 2022, at 07:00 New York time/14:00 Nairobi time and was free and open to the public.
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