Ghana Sets Ambitious Growth Vision

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Ghana Sets Ambitious Growth Vision

14 août 2021 17:36

The full impact of the global pandemic that rocked everyone in 2020 is being evaluated already. Several countries are realising that the health crisis imposed choices on them that ultimately led to high indebtedness and economic setbacks. One of such examples is Ghana that dropped from a 6.5 per cent GDP in 2019 to 1.7 per cent in 2020. As the second economy in West Africa, their case has obviously been of crucial concern to many economic analysts since they could also serve as part of the engine for growth in the rest of the sub-region. A recent report by the International Monetary Fund, IMF, says Ghana currently intends to move from a 0.4 per cent growth in 2020 to 4.7 per cent in 2021. It will therefore be a fascination to see how the country overturns the hurdles that they are facing as a result of the Covid-19 so that their economy could bounce back. Crude oil exports have been part of the recent trump cards that Ghana laid their hands on, but the sector happens to have suffered most from the generalised shocks that the world witnessed from the onset of the health crisis. Lockdowns across many countries meant that the aviation industry, tourism, and manufacturing sectors had to pipe down on their activities. Some even underwent total closure. The year 2021 has however come along with gradual rebirth in all major service and production areas that went out of steam as a result of the disease. Ghanaian mining and cocoa production sectors which have sustained the country in the past also faced challenges. Price fluctuation in the world market has often had negative impact on cocoa and extractive activities in Africa where there is heavy dependence on raw materials for export and economic development. Nonetheless, Ghana intends to sustain its growth thanks to a budding recovery in construction and manufacturing sectors, combined with favourable gold and cocoa prices. IMF statistics show that, the country remains at high risk of debt distress in the International Monetary Fund’s 2019 Debt Sustainability Analysis because of solvency and liquidity risks. The public debt-to-GDP ratio reached 71 per cent in September 2020 from 63 per cent a year earlier, but banking sector reform, including recapitalization of banks and liquidation of insolvent financial institutions, have enhanced the overall resilience of the sector. Firm and household surveys quoted in the IMF report also disclosed that during the partial lockdown, about 770,000 persons witnessed reduced wages and 42,000 lost their jobs. Such a situation created an imbalance which the country has to tackle in order to attain expected results. There are factors that have given much hope to the Ghanai...