World’s fastest growing economy with a forecast of 13.6% GDP in 2011 thanks to oil production, Ghana’s rapid growth is yet to translate into jobs, says a special report published by UK’s Financial Times (FT) December 14, 2011.
The report by William Wallis, says Ghana is the only mainland country in west Africa to have achieved lower middle income status on statistics revised last year (2010) to take into account a decade of rapid expansion in services.
With these feats, the FT says “Yet, there is little sense of a boom” adding “three years into an International Monetary Fund-backed stabilisation programme, businesses are impatient, while the crowded streets of poor neighbourhoods speak of frustration and hardship.”
“…the pace of job creation is slow, government borrowing is still crowding out the private sector, bank lending rates are prohibitively high, and the feel-good factor that the first year of oil production was expected to bring has yet to materialise,” writes William Wallis.
According to the report, the nation’s capital – Accra has its share of gifted entrepreneurial thinkers with the capacity to turn dreams into reality and that the capital is becoming the de facto regional hub for corporations as a result of all the troubles in the neighbourhood and the country’s comparatively stable political environment.
The FT cited Mr Joe Abbey, Executive Director of the Centre for Policy Analysis (CEPA) – an independent think-tank, describing the growth as “jobless”.
“This [lower middle income status] provides the basis for traditional partners to withdraw, and grant elements to decline. But if you use non-concessional loans in the same way, it will be a fast track to super-HIPC (highly indebted poor country) without hope of debt relief,” Mr Abbey was quoted as warning.
The FT indicates that Ghana’s first year of oil production which has added about 7% GDP to the economy was due to capital rather than labour-intensive.
The publication argues that gold revenues increased not on the back of new mining ventures so much as on the soaring world price.
It says manufacturing, which might provide employment, is still struggling to get going amid constraints in power supply and credit.
As elections approach, the FT noted, government might increase borrowing and turn on the taps again, just as the conditions for progress are beginning to fall into place.
This is particularly so as Ghana will soon no longer have access to the soft loans that multilateral donors brought, it added.
By Ekow Quandzie