Iddi Yire/Yaw Ansah, GNA
Accra, Oct 03, GNA –
The Institute of Statistical, Social and Economic Research (ISSER), University
of Ghana (UG), on Tuesday said Ghana’s fiscal situation improved considerably
in 2017.
The growth was
attributed to both higher revenues and lower expenditures as a proportion of
Gross Domestic Product (GDP), leading to a smaller fiscal deficit.
Professor Felix
Ankomah Asante, Director, ISSER, College of Humanities, University of Ghana,
stated this at the launch of the 27th edition of the “State of the Ghanaian
Economy Report”.
Prof Asante said to
ensure that medium-term growth targets were met; there was a need for massive
investment in productive infrastructure and for prioritising non-traditional
exports.
On the fiscal side, he
noted that there was the need for prudent management of government resources,
while increased efforts should be pursued to mobilise revenue through an
expanded tax base; adding that government expenditure must be kept under
control.
Nana Osei-Bonsu, Chief
Executive Officer, Private Enterprise Foundation, who formally launched the
report, lauded ISSER for coming out with the annual report; stating that it
would go a long way to help investors to make informed decisions.
Dr Simon
Bawakyillenuo, a Senior Research Fellow/Head Statistics and Survey Division,
ISSER, UG, said the motivation for continuing to publish the State of the
Ghanaian Economy Report spring from their commitment to provide accurate,
independent and well-researched information about the Ghanaian economy.
It said Ghana’s external
balance improved substantially in 2017, due to both an expansion in exports and
a contraction in imports, both nominally and as a proportion of GDP.
The report said trade
balance even enjoyed a surplus, for the first time in recent history; adding that
this balance was projected to fall slightly to -0.5 per cent by 2019.
It said the external
current account deficit improved by some two percentage points in 2017, and was
projected to fall further to 4.0 per cent by 2019.
On inflation, the
report said Ghana’s inflation rate had been historically high, often about
twice the Sub-Saharan African average.
Citing the
International Monetary Fund (IMF), the report explained that however, the gap
had been closing, with Ghana’s average inflation rate decreasing from 17.5 per
cent in 2016 to 12.4 per cent in 2017, compared to SSA’s slight decline from
11.3 per cent to 11.0 per cent.
“Interest rates
remain very high in Ghana, especially compared with very low rates globally.
Such levels are likely to discourage borrowing and productive investment. Thus,
the decline in real long-term rates in Ghana during 2017 is a welcome
development,” it said.
It said although total
government debt had decreased from 73.4 per cent of GDP in 2016 to 71.8 per
cent in 2017, it remains far above the debt-to-GDP ratio of SSA as a whole
(45.9 per cent).
“Indeed, this
2017 debt ratio is double its level in 2009, and is huge by both historical and
SSA standards, with a rapidly increasing share owed to the domestic and
external private sectors.”
With regards to the
Government’s flagship programme “Planting for Food and Jobs”, the
report recommended the pursuit of an economic-centred growth strategy that
would ensure that employment expands along production and that the benefits of
growth would be widely shared through better job opportunities and enhanced
incomes.
The report said at 8.5
per cent Ghana’s gross domestic product (GDP) growth in 2017 was a rebound from
the downward trend since 2011.
According to IMF
report quoted by ISSER, Ghana’s growth rate was projected to slow to 6.3 per
cent in 2018, down 2.2 percentage points on the 2017 rate. This forecast was
based on lower growth of the oil sector but an increase in the non-oil growth
rate from 4.0 per cent to 5.0 per cent.
However according to
the ISSER report, a rise in non-oil sector growth would be good news, given the
concern of possible oil dependency.
The ISSER projection
also critically assumes that the erratic power outages (the dumsor challenges)
involving constraints in energy supply would have been addressed, that of
course remains to be seen, though significant improvements occurred in 2017.
The report said
structural limitations in infrastructure and labour markets along with
fluctuating commodity prices have contributed greatly to the recent slowdown in
growth momentum in many emerging and developing economies.
It said continuing
higher commodity prices would certainly help to prop up growth.
It said it was hoped
that not only would the dumsor bottleneck be a thing of the past in Ghana for
the medium and presumably long term, but also that the country’s other
infrastructural problems would receive maximum attention in order to sustain
growth.
GNA