The Africa Centre for Energy Policy (ACEP), an energy policy think-tank, said the “Dutch disease” loomed in Ghana as productivity in the economy was low with oil revenue posting impressive performance for the year.
The Dutch disease is normally found in oil-rich countries where there is increase in the exploitation of natural resources and a decline in the manufacturing sector.
A statement signed by Mr Mohammed Amin Adam, Executive Director of ACEP, expressed worry that the oil and gas sector, which had low linkages with the economy, had outpaced cocoa as the second largest export of the country.
It said oil exports posted $2.8 billion due to increasing production as against $1.4 billion by cocoa, attributable to declining global commodity prices adding; “we strongly believe the effects of the Dutch disease cannot be discounted.”
The statement said evidence of unimpressive performance in the agricultural sector and relatively lower depreciation of the cedi by 3.9 percent in 2013, as against 18 percent for 2012, were real currency appreciation, a condition that dampened demand for export commodities and general international competitiveness.
It recommended that Government took steps to address the Dutch disease phenomenon, especially as the Bank of Ghana planned to inject more dollars into the economy, to stabilise the cedi and increase productivity.
The statement said the total oil revenue grossed GH¢1,150.4 million was realised as of August 2013, exceeding the target for the period of GH¢362.3 million representing 46 percent.
ACEP urged the Government to accordingly revisit its proposals of passing the Industry Competitiveness Law.
It suggested vigorous pursuit of the local content policy to ensure the growing oil sector did not become an enclave and foreign exchange earner only but also compensated for the declining growth in the agricultural and manufacturing sectors through value addition.