\n \nThe Vice President, Nana Akufo- Addo earlier raised concerns about the stalled contract <\/span> \n<\/figure>\n
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Ghana\u2019s economy is skyrocketing. That is what the World Bank and the International Monetary Fund (IMF) predict for\u00a0this year. The IMF talks of a growth rate of 8.8%\u00a0in its World Economic Outlook, which would make\u00a0Ghana the fastest growing economy in the world in 2019. Last year, the country\u2019s economy only grew by 5.6%, putting it in sixth position. Where\u00a0does this new impetus\u00a0come from\u00a0and in which sectors is Ghana doing particularly well?<\/p>\n
Adu Owusu Sarkodie from the University of Ghana believes\u00a0the main source of growth is the oil sector. \u201cWe have discovered new oil fields [\u2026..] companies have started operating, they have intensified their operations,\u201d he said in an interview with\u00a0DW. In the list of top\u00a0African countries growing economically, Ghana is closely followed by its neighbor Ivory Coast with 7.5%, and Ethiopia with 7.7%.\u00a0\u00a0It is interesting that the growth rate from 2018 to 2020 of those two countries\u00a0appears\u00a0to be consistent, while Ghana\u2019s growth is predicted to decline again in 2020.<\/p>\n
\u201cI think this is more a one-off,\u201d, Papa Ndiaye, Head of the Regional Studies Devision at the IMF\u2019s African\u00a0Department, told DW. \u201cWe don\u2019t expect this growth rate (of 8.8%) to be sustained over the medium term. And when you look at it\u00a0per capita, that is still smaller than what countries like China have experienced in the past.\u201d Ndiaye confirmed\u00a0that Ghana\u2019s economic growth is expected\u00a0to slow to a level of\u00a0around 4.5%\u00a0to 5%.<\/p>\n
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Ghana\u2019s backbone<\/strong><\/p>\n
For Africa\u2019s\u00a0number one growth state, Ghana, oil is not the only factor driving the economy.\u00a0\u201cThe non-oil sectors, agriculture, manufacturing and services, they are also picking up. Now they are all growing positively,\u201d Sarkodie said.<\/p>\n
The agriculture sector has received a major boost over the past two years, thanks to a strong focus by policy-makers on\u00a0food and jobs. For\u00a0example, 200,000 farmers received improved seeds and fertilizers. The sector remains a major backbone of Ghana\u2019s economy. According to Agriculture Minister Owusu Afriyie Akoto, the program has led to a good harvest across the country. \u201cWe are expecting a bumper crop because of the impact that this great program has had on agriculture, even in its infancy,\u201d he said.<\/p>\n
\nCocoa is Ghana\u2019s main agricultural export commodity<\/figcaption><\/figure>\n
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Winners and losers<\/strong><\/p>\n
But where there are winners, there are also losers. Angola comes in last on the list of African\u00a0countries,\u00a0with a predicted economic growth of just 0.4%. Last year it suffered a decline of 1.7%. South\u00a0Africa is also far behind, with an expected growth rate of only\u00a01.2%, an increase of\u00a00.4%\u00a0on 2018. Third from last is\u00a0oil giant Nigeria, with a growth rate of\u00a02.1%.<\/p>\n
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\u201cThese\u00a0countries have been hit very hard by the decline in commodity prices,\u201d Ndiaye said. \u201cYou have to go back to the 1970s to find something of similar magnitude. These countries\u00a0are now slowly\u00a0 recovering but it will take some time. It also requires\u00a0countries to implement reforms to diversify the economy and to boost private sector activity by removing some of the constraints that are the biggest impediments to growth, as well as\u00a0restoring a better business environment.\u201d<\/p>\n<\/blockquote>\n
The IMF divides\u00a0the 46 listed countries into three groups: oil exporters, middle-income countries and low-income countries. The group of oil exporters, with a growth rate of 2.0%, is doing less well\u00a0than middle-income countries with 3.4% and low-income countries with 5.3%, a trend that could already be seen in 2018. In total, sub-Saharan African can register\u00a0GDP\u00a0 growth of 3.5%. What makes this year\u2019s prediction so interesting for Africa is that it is an African nation that seems to be the economic front-runner, ahead of international heavyweights like China or India.<\/p>\n
\u2018Economy must be Ghana owned\u2019<\/strong><\/p>\n
Ghana is the world\u2019s second biggest producer of cocoa, which is probably also a reason why\u00a0the West African country is the continent\u2019s\u00a0and the world\u2019s leader when it comes to increased economic strength. But unlike the agricultural sector, where a lot of Ghanaians are playing a role, investments in the mining and oil sectors have been largely foreign led. According to Sarkodie, this is a problem, even though these investments have a long term effect.<\/p>\n
\u201cMy major concern has to do with the source of growth,\u201d he told DW. \u201cThe GDP is a domestic product, it doesn\u2019t matter what is produced by foreigners or Ghanaians. But we know that in Ghana most of our companies are foreign owned.\u201d This means, Sarkodie says, that \u201cthe impact on Ghanaian lives will be minimal.\u201d<\/p>\n
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Young Ghanaians turned out in force for a \u201c77 Percent\u201d youth debate organised by DW in Accra in November 2018<\/p>\n<\/div>\n
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Digitize the economy<\/strong><\/p>\n
To be able to attract investors, countries need well-designed reforms\u00a0to assure entrepreneurs of returns. That is what\u00a0Ghana has been trying to do. Three years ago, the government secured a loan from the IMF of $925.9 million (\u20ac820 million). The arrangement, which ended in early\u00a0April,\u00a0aimed to restore debt sustainability and macroeconomic stability in the country in order to foster a return to high growth and job creation while protecting social spending. Several\u00a0economic reforms, including reducing the budget deficit and cutting down on corruption, were rolled out. According to Ghana\u2019s finance minister, Ken Ofori-Atta,\u00a0some of these measures have re-positioned the economy. \u201cInflation is at a single digit, which is good. The growth has been strong, 6% through the third quarter of last year. Our budget deficit has gone down and we are also getting surpluses in our current account.\u201d<\/p>\n
Sarkodie agrees that Ghana\u2019s domestic economic management has been on the right track. \u201cWe went into the IMF program seeking policy credibility; in fact, at the time we went to the IMF program, things were very bad. Now, all the macroeconomic indicators look good. Inflation is down, the exchange rate is a bit rough now, but I am sure it will be stabilized,\u201d he said.<\/p>\n
What needs to happen now is that\u00a0conditions for the high growth rate to be sustained are created, says Ndiaye. \u201cAnd that means containing vulnerabilities. That means boosting private sector activity, making sure that the private sector is leading growth. And it also requires making growth inclusive because that\u2019s one of the key requirements for sustaining a high growth rate for a long period of time.\u201d<\/p>\n
Ghana is now looking to boost\u00a0\u00a0technological innovations and get more\u00a0young people involved in sustaining and improving the country\u2019s economic performance.<\/p>\n
![\"IMF](\"https:\/\/cdn.ghana-mma.com\/2019\/04\/bawumia-e1553167990801.jpg\")
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![\"Right](\"https:\/\/cdn.ghanamma.com\/2019\/04\/Say-yes-to-ads-Banner-728-X-90.jpg\")
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<\/div>\n![\"A](\"https:\/\/cdn.ghanamma.com\/2019\/04\/47292401_401.jpg\" "\\"Cocoa")
![\"A](\"https:\/\/cdn.ghanamma.com\/2019\/04\/46294031_401.jpg\" "\\"Young")
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