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Ghana is on course to a Middle-Income
Status...But
A GNA Feature by Paul Achonga Kwode
Tamale, May 18, Ghanadot/GNA - The overall performance of the economy
of Ghana over the past years has shown an immense
improvement towards the achievements of the middle-income
status target by 2015.
Statistics at the Ghana Statistical Services indicate that
in 2000, the GDP rate was at 3.7 per cent; 2001, 4.2 per
cent; 2002, 4.5 per cent; 2003, 5.2 per cent; 2004, 5.6 per
cent; 2005, 5.9 per cent, and in 2006 grew to 6.2 per cent.
Ghana's inflation rate hit single digit in March (9.9 per
cent) and April (9.5 per cent) in 2006, but could not be
sustained owing to the impact of the upward adjustment in
domestic prices of petroleum products in line with the
rising price of crude oil on the international market. In
the event, inflation edged up to 10.5 per cent at the end of
October 2006 but however gained a single digit of 9.8 per
cent in March 2007.
The economy of Ghana which had been shattered into
stagnation over the past four decades with the currency
rendered unstable and eaten away by high inflation which
left massive unemployment and national institutions
weakened, had now been stabilised and poised for accelerated
development.
Ghana accessed the Highly Indebted Poor Countries (HIPC)
initiative and adopted the Growth and Poverty-Reduction
Strategy I (GPRS I) in 2001. The Country’s Development
Partners acknowledged the sacrifices of the young democracy
and decided to forgive the nation about eight billion
dollars debts accumulated.
On reaching the HIPC completion point in July 2004, two
billion dollars of debt was cancelled outright by the Paris
Club of creditors with a further two billion dollars to be
forgiven in instalments over the next 20 years.
Under the G-8 and multilateral debt relief, Ghana is to be
forgiven additional 4.2 billion dollars leaving the country
with an immense opportunity to pursue its national
aspirations.
"Ghana is currently one of the best-performing economies in
Africa, by improving policies and institutions and investing
in infrastructure and basic services and bringing poverty
levels from 53 per cent in 1992 to 35 per cent in 2003", the
International Development Association (IDA), a part of the
World Bank described the economy of the country in February
2007.
It continued that Ghana is likely to surpass the Millennium
Development Goals (MDGs) of halving poverty by 2015 and
economic growth had averaged 4.5 per cent from 1983 to 2000
but accelerated to 5.8 per cent in 2004 and 6.0 per cent in
2005 in response to Government’s programmes of reforms.
The International Development Association also said the
country's access to electricity was the highest in the
Sub-Saharan Africa outside South Africa and augured well for
the achievements of a middle-income status.
Experts say good democratic tenets within the framework of
good governance; private sector development; rule of law;
respect for human and property rights and far-sighted fiscal
and economic management had been the major driving forces
that are propelling the Country to a middle-income status.
THE MAJOR DEVELOPMENTS IN THE AGRICULTURAL SECTOR
The Country's agricultural production over the years has
been tremendous.
In 2006 the National Seed Support Service produced 55 tonnes
of foundation seed maize; processed 500 tonnes of certified
maize seed; eight tonnes of sorghum and 25 tonnes of rice
foundation seeds for planting. A total of 200 tonnes of
maize grains was processed for storage.
The Inland Valley Rice Development Project extended credits
to 905 farmers to put 340 hectares of rice under the Nerica
Rice Dissemination Project in 2006.
The Irrigation Company of the Upper Region (ICOUR) in
Navrongo facilitated the production of 200 tons of paddy
rice seed; 1,800 tons of rice grains and also cropped 220
hectares of millet and 34 hectares of soyabeans at its Vea
and Tono Dams Projects.
Food prices had been stabilize to improve the well being of
farmers and to facilitate the establishment of National
Strategic Food Stock, the Ministry of Agriculture
rehabilitated three warehouses at Tamale and Yendi for grain
storage. The Ministry in addition assisted farmers in the
Northern Sector with land preparation and seeds for the
establishment of 10,000 hectares of cotton.
Grains and Legumes Development Board (GLDB) produced
foundation seeds to enhance farmers' access to viable and
high yielding leguminous seeds in the minor season. As a
result, 20 tonnes of foundation seed groundnuts was produced
to enable farmers to access rosette resistant groundnut
seeds.
About 1,571.9 hectares of cashew fields was in 2005-6
established with the assistance of the Cashew Development
Project. About 9,000 unproductive cashew trees (90 hectares)
within the 10 Project Districts were stumped and grafted
with scion materials taken from trees with desirable
characteristics to increase yields.
In collaboration with the Crop Research Institute (CRI),
technological packages were developed to enhance cashew
production. The packages included vegetative propagation
techniques; development of a strategy for canopy
substitution and control of Cashew diseases.
The World Fact book had in 2007 described the economy of
Ghana, as roughly twice the per capita output of the poorest
countries in West Africa though remains heavily dependent on
the international financial and technical assistance.
The Country's democracy had also been rated in Africa as the
best emerging country in political stability and the beacon
of hope for the rest of Africa.
It believed that one of the outcomes of good governance is
economic development and the stronger the democratic
performance, the vibrant such an economy would be.
CAN THE COUNTRY OVERCOME THESE OBSTACLES?
The 2006 birth rate estimate of the country stood at 30.52
births per every 1,000 birth and the death rate was 9.72
deaths per 1,000 people. The infant mortality rate is 55.02
deaths per every 1,000 live births. Life expectancy at birth
was also estimated at 58.07 years for males and 59.69 years
for females and total fertility rate was 3.99 children born
per woman (source; World Fact Book). This is highly
undesirable.
The country still remains the second in the world in guinea
worm cases. The current records show that at the end of the
year 2006, out of the 4,132 cases of guinea worm infections
recorded in the Country 3,653 representing 88.4 per cent
cases were recorded in the 10 most endemic districts, all of
which were in the Northern Region.
Can the country obtain a middle-income status with these
debilitating current statistics on health? It is heartening
to say that the Country is making strenuous effort to
improve upon the health status of the people since health
good health is one of the major MDGs.
Ghana is hit with yet another traumatic situation making the
obtainment of a middle-income status doubtful and this is
undoubtedly the energy crisis. The country since September
2006 has been faced with low electricity supply resulting in
low productivity in the industries. Volta Aluminium Company
(VALCO) had to be closed down and consequent laying-off of
workers.
The level of water at the Volta Dam on May 16 2007 was
236.04 feet compared to the maximum operational level of
278.00 feet and minimum level of 240.00 feet.
There is not denying the fact that energy is the major
driving force of all economies in the world and the problems
a country would face should it face energy crisis like in
Ghana is anybody's guess - low productivity; high cost of
production; high inflation; low GDP and high rate of
unemployment are likely to arise.
The harm to the economy had already been caused and efforts
to reverse the situation to salvage the economy from the
looming dangers should be intensified.
Dr Sam Mensah in his publication: "Legislative Alert"
maintained that there was consistency among the causes of
the Country’s economic impotence. Instead of focusing on the
activities that would promote sustainable resource base,
much energy was expended on attracting unsustainable
resources mainly from multilateral and bilateral sources.
This results in implementing forced policies that further
take the Country away from more efficient resource
mobilization and allocation path. This also makes the
Country unable to apply targeted interventions to jump-start
the financial system because of donor resistance to State
participation in financial intermediation.
Ghana, therefore, needs critical measures like investing
adequately in the revenue mobilization mechanisms and
establishing systems that would formalize economic
participation at all levels thus broadening the net for
resource mobilization.
Brett Schaefer, a Policy Expert at the Centre for
International Trade and Economics at the Heritage
Foundation, painted the picture clearly about developing
countries like Ghana that “economic futures of developing
countries lies predominantly in their own hands through the
policies that they choose to adopt and enforce; if countries
want to increase per capita GDP, they should adopt policies
that are most likely to achieve that results and change
their approach to foreign assistance”.
Again, a research conducted by the Heritage Foundation
indicates that the best way for countries to increase
economic growth is to adopt policies that promote economic
freedom and the rule of law, which are measured in the Index
of Economic Freedom.
The strife towards the achievement of a middle-income status
is widely outspoken but meeting the goal requires a
multifaceted and multi-dimensional approach and policy
makers and implementers should focus their target
holistically.
GNA
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