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Policy Comment

The report, compiled by a team of researchers from ISSER, cited structural limitations in infrastructure, labor markets, and declining commodity prices as contributory factors to the slow-down in the growth momentum in many emerging and developing economies, including Ghana.

Nevertheless, it noted that the near-term outlook for Ghana was positive, with growth projected at 8.0 per cent and that of non-oil at 6.5 per cent in 2014.

“Backed by strong investment in the oil and gas sectors, as well as by the public infrastructure and favorable commodity prices, Ghana can sustain continuous economic growth and provide continuous economic growth well into the future, provided the country improves its macro-economic management which requires bold efforts to reduce its budget imbalance,” it added.

The SGER, which is the 23rd edition in the series of publications since 1991, provides a detailed assessment of how the various sectors of the economy, notably agriculture, industry, and services fared in the past year.

The Director of ISSER, Professor Felix Asante, who presented an overview of the report, said Ghana’s economic growth remained fairly resilient in the face of the global recession, though the rate had been declining since 2011.

He said the economy’s real Gross Domestic Product (GDP) growth rate of 5.4 per cent in 2013, however, was short of the targeted 8.8 per cent.

“This negative out-turn is the largest since 2008. For instance, in 2012, the shortfall was 0.6 per cent, compared to the 3.4 per cent in 2013,” he said.

Prof. Asante said Ghana’s growth in 2013 was buoyed particularly by oil exports, with the non-oil GDP growth rate of 3.9 per cent, compared with 5.4 per cent growth for the overall GDP.

“Furthermore, the oil sector accounted for a much larger proportion of GDP growth in 2013 than in 2012, when the overall GDP and non-oil GDP growth rates were 7.8 per cent, respectively,” he said.

Prof. Asante attributed the downward performance of the agricultural sector to the rapid expansion in the oil sector, which shrieked the contribution of the agricultural sector in relative terms, even though the sector was experiencing some expansion in absolute terms.

On inflation, he said the end of inflation rate in 2013 was 13.5 per cent compared to 8.8 per cent in 2012, far exceeding the targeted rate of 9.0 per cent.

The Pro-Vice-Chancellor, Innovation, Research and Development (RID), University of Ghana, Prof. John Owusu Gyapong, launching the report, said as an educational institution of higher learning and marching towards a research institution, “it is our duty to throw more light on issues rather than generate them.”

He said so many discussions generated on the airwaves these days turned out to confuse the uninformed and “I think it is the responsibility of academia to contribute to unraveling what the truths are.”

Prof. Gyapong said people only threw heat on issues instead of throwing light to inform the public and urged ISSER to continue the in-depth analysis and try to sustain it on a yearly basis. 

Source: Ghana Web