Ghana to face worse growth outlook this year – Experts predict

Business News of Wednesday, 4 March 2015

Source: Graphic Online


Two Ghanaian economic experts have predicted a worsening growth outlook for Ghana this year, particularly for indigenous businesses, if urgent measures are not taken to solve the energy crisis.

Whereas the former Deputy Bank of Ghana Governor, Mr Emmanuel Asiedu-Mante, contended that the current energy crisis continued to crumble the business sector, Professor Felix Asante of the Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, Legon, said employers were more likely to cut down labour force if the situation persisted.

The two speakers made their concerns known when they separately mounted the stage at the maiden edition of a public forum organised by the Chartered Institute of Bankers in Accra.

The forum, which had the theme: “Monetary Policy Stance and the National Budget: Implications for Businesses in 2015,” was chaired by Dr Oteng-Gyasi, the Managing Director of Tropical Cable and Conductor Limited.

Immediate solution

Mr Asiedu-Mante said unless immediate solutions to the energy problem were pursued with urgency, Ghana’s business sector would suffer heavily in 2015.

“It is apparent that every sector of the economy is reeling under the pressure of the energy crisis, households are hurting and businesses are crumbling and jeopardising growth in industry and the services sectors,” he said.

According to Mr Asiedu-Mante, even though Ghanaians had observed some momentum in seeking solutions to improve the generation mix over the medium to long term, “the short-term solutions for ending the power crisis are far from clear.”

He said the latest release by the Ghana Statistical Service had revealed that the protracted energy crisis, lower commodity prices, rising inflation and lower budgeted government expenditure took a major toll on the country’s economy in 2014.

“That is why I cannot but emphasise the need to find immediate solution to the energy crisis in particular as it has the potential to weaken growth prospects in 2015 and beyond,” Mr Asiedu-Mante said.

Slow economic activities

Prof. Asante said Ghana’s economic activities were expected to slow down in 2015 unless pragmatic steps and concrete reforms were pursued by the government.

With projected growth rate below four per cent, he said job creation would be minimal in 2015, causing unemployment to increase.

Touching on the International Monetary Fund (IMF) bailout programme, Mr Asante said such bailout programme would both affect and enhance the development of the economy.

“The IMF-supported programme will help strengthen as well as enhance fiscal consolidation since it will bring in additional resources to support both the budget and the balance of payment,” he said.

However, he said the IMF bailout would most likely result in Ghana taking such hard decisions as cutting down the labour force in the public sector.