According to the IMF’s latest Regional Economic Outlook for sub-Saharan Africa, dubbed: “Sub-Saharan Africa: Domestic Revenue Mobilisation and Private Investment,” the Region was set to enjoy a modest growth uptick.
“The average growth rate in the Region is projected to rise from 2.8 per cent in 2017 to 3.4 per cent in 2018, with growth accelerating in about two-thirds of the countries in the Region,” the Report said.
Dr Natalia Koliadina, the IMF Resident Representative to Ghana, unveiled the 126-page Report on Wednesday at a forum organised by the Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, Legon.
The Report indicates that the growth pickup in Sub-Saharan Africa had been driven largely by a more supportive external environment, including stronger global growth, higher commodity prices, and improved market access.
It said while external imbalances had narrowed, the record on fiscal consolidation had been mixed and vulnerabilities were rising: about 40 per cent of low-income countries in the Region were now assessed as being in debt distress or at high risk of debt distress.
On current policies, the Report noted that the average growth in the Region was expected to plateau below four per cent — barely one per cent in per capita terms — over the medium term, highlighting the need for deliberate actions to boost growth potential.
It said turning the current recovery into sustained strong growth consistent with the achievement of the Sustainable Development Goals (SDGs) would require policies to reduce vulnerabilities and raise medium-term growth prospects.
The Report said prudent fiscal policy was needed to rein in public debt, while monetary policy must be geared towards ensuring low inflation.
The Report said countries should also strengthen revenue mobilisation and continue to advance structural reforms to reduce market distortions, shaping an environment that fosters private investment.
It said domestic revenue mobilisation was one of the most pressing policy challenges facing sub-Saharan African countries.
It said the low level of private investment was constraining the Region’s efforts to improve social outcomes by holding back labour productivity and the resulting gains in real wages and households’ income.
Dr Koliadina said domestic revenue mobilisation and private investment were essential for most countries including Ghana to accelerate their socioeconomic development.
She said the Ghanaian authorities had been working in those areas, aiming to achieve high and sustainable economic growth, while maintaining macroeconomic stability.
“There are now plans to mobilise the additional resources to ensure adequate and stable financing for Ghana’s development needs, which would help achieve the SDGs.”
“We have been implementing the contract with African partnership to attract private investment to Ghana,” she added.
Professor Ebenezer Oduro Owusu, the Vice-Chancellor of UG, said economic growth necessarily did not translate into the pocket of the people.
“I dare to ask whether this growth automatically translates into job creation for our youth. Does it offer the necessary prospects for our graduates who would be exiting the tertiary institutions and those in the labour market already to operationalise their innovative and entrepreneurial skills,” he asked.
Prof Felix Ankomah Asante, the Director of ISSER, UG, said Ghana needed to find a very convenient way of collecting property rates and other taxes.
He noted that if the nation was able to raise more revenue from taxes, there would be no need to go about borrowing for infrastructure development.
An overview of the Report and its implication for Ghana was collectively given by Mr Papa M. Bagnick N’Diaye, the Division Chief, Regional Studies Division, IMF, Africa; Dr Annalisa Fedelino, the Mission Chief for Ghana, the Assistant Director, Africa, IMF; and Dr Jesus Gonzalez-Garcia, Senior Economist, Regional Studies Division, Africa, IMF.