Reference – Ghana Web
Ghana’s economy may expand at 8% by end of 2013, the African Development Bank (AfDB) said in its latest African Economic Outlook (AEO) published May 27, 2013.
It is also predicting an 8.7% growth of the Ghanaian economy in 2014.
The report estimated that Ghana’s GDP grew at 7.1% in 2012 largely driven by oil revenues, the services sector and the strong export performance of cocoa and gold.
According to the 2013 AEO which was launched at the ongoing AfDB Annual Meetings in Marrakech, Morocco, Ghana’s medium term growth outlook remains positive and this is “thanks to large investments in the extractive industries, public infrastructure and commercial agriculture”.
“Ghana’s medium-term outlook remains healthy, with projected GDP growth of 8.0% (6.5% non-oil) in 2013 and 8.7% (8.9% non-oil) in 2014, well above the average annual growth rate of 6.5% for the period since 2000,” it said.
The report anticipates that investments in the oil and gas sectors, public infrastructure and commercial agriculture will drive the Ghana growth.
Ghana’s 2013 budget presented by Finance Minister Seth Terpker in March this year also set a GDP growth of 8% for the year 2013.
Ghana’s GDP growth slowed from 14.4% in 2011 to 7.1% in 2012 and according to the report, the economic growth peak in 2011 was due to the start-up of oil production in the last quarter of 2010.
It adds that the growth performance in 2012 was achieved despite lower cocoa and oil production.
The AEO indicated that improved macroeconomic management and enduring political stability “have not significantly transformed the structure of Ghana’s economy over time”. It says “Mining and construction have sustained the industrial sector, while manufacturing has been declining as a share of GDP over the past 20 years.”
The AfDB report called on the Ghanaian government to develop new, labour intensive economic sectors such as manufacturing and agro-processing in order to tackle the employment challenge and provide economic opportunities to rural areas. This, it says, “will require coherent public policies to raise agricultural yields, improve the competitiveness of the economy and overcome land tenure issues”.
It stated that the expenditure of Ghana’s oil revenue “will be crucial” to the country’s future economic transformation adding “the increased oil revenue and foreign direct investment (FDI) inflows may result in strong upward pressure on the exchange rate and threaten prospects for industrialization”.
In 2010, Ghana enacted a legal framework for sound management of its oil wealth, and thus far its programme of hedging oil imports and exports has succeeded in maintaining macroeconomic stability.
Although Ghana has been classified as a low middle-income country by the World Bank since 2010, the AEO opined that the country’s development indicators compare poorly with those of most countries in the same category.
It acknowledged that Ghana has made significant progress towards attaining the Millennium Development Goals (MDGs).
“It is likely to attain the MDGs on the eradication of extreme poverty, universal primary education, promotion of gender equality, empowerment of women, and combating HIV/AIDS, malaria and other diseases,” the AEO says.
However, it observed that Ghana continues to be challenged by slow progress on reduction of under-5 mortality, improvement of maternal health and environmental sustainability.
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