Ghana’s economy is projected to experience a moderate growth of 4.5 per cent for 2017-2018, based on improving investor sentiment, the launch of new oilfields and the easing of the electricity crisis, the World Bank has said.
“Several countries are expected to see moderate growth. Among frontier markets, growth is expected to edge up in Ghana, driven by improving investor sentiment, the launch of new oilfields and the easing of the electricity crisis,” it said.
The forecast was contained in Africa’s Pulse, the bank’s twice-yearly analysis of economic trends and latest data for the Africa region which was disseminated via a video conference from Washington to media houses in 12 African countries yesterday.
Addressing the media, the acting Chief Economist of the World Bank Africa and author of the report, Ms Punam Chuhan-Pole, said the rapid decline in oil and commodity prices had adversely affected resource-rich countries and that signalled an urgent need for economic diversification in Ghana and for that matter Africa.
She, therefore, advised the diversification of the sources of growth, since the drop in commodity prices would not improve anytime soon.
Agriculture, she said, was ripe for transformation with the availability of appropriate technology and requisite human resource.
She also called for the consideration of land and estate taxation as an avenue for raising capital.
Managing growing cities
As Africa underwent rapid urban growth, Ms Chuhan-Pole said, there was a window of opportunity to harness the potential of cities as engines of growth.
She said the growth of cities, when well managed, could spur economic growth and productivity.
She, however, expressed regret that African cities were currently not reaping urban productivity benefits because of high housing and transport costs.
Housing and transport, she said, were particularly costly in urban areas, adding that housing prices were about 55 per cent higher relative to income levels, while transport, which included vehicles and transport services, was about 42 per cent more expensive compared to other countries.
Like households and workers, Ms Chuhan-Pole said, firms also faced high urban costs and that cross-country analysis confirmed that manufacturing firms in African cities paid higher wages in nominal terms than urban firms in other countries at comparable development levels.
“To ensure growth and social development, cities need to become less costly for firms and more appealing to investors. They must also become kinder to residents, offering services, amenities. All of these will require reforming urban land markets and urban regulations and co-ordinating early infrastructure investment,” she said.
Springboard for diversification
“Africa’s growing urban centres offer a springboard for diversification. But they need better institutions for effective planning and co-ordination that can raise urban economic density and productivity and spur the region’s transformation,” she stressed.
The World Bank Vice-President for Africa, Mr Makhtar Diop, said the plunge in commodity prices, particularly oil, which fell by 67 per cent from June 2014 to December 2015, as well as weak global growth, especially in emerging market economies, was behind the region’s unimpressive performance.
He said the external environment confronting the region was expected to remain difficult and that delays in implementing adjustments to the drop in revenue from commodity exports and worsening drought conditions presented risks to Africa’s growth prospects.
“As countries adjust to a more challenging global environment, stronger efforts to increase domestic resource mobilisation will be needed. With the trend of falling commodity prices, particularly oil and gas, it is time to accelerate all reforms that will unleash the growth potential of Africa and provide affordable electricity for the African people,” Mr Diop advised.