As a long-term economic and social transformation strategy, the European Union (EU) is supporting Ghana’s national development drive with emphasis on investment and job creation with a€40 million facility.
This is part of Africa-Europe Alliance aimed at strengthening the EU’s partnership with Africa by boosting investment and trade on the continent to achieve Sustainable Development Goals (SDGs).
The agreement was signed by EU’s Ambassador to Ghana, Ms Diana Acconcia, and Finance Minister, Ken Ofori-Atta in Accra.
The support will be an enabler to fast-track the execution of structural reforms for strong, inclusive and job-creation growth in the economy.
“This budget support operation is an important lever to strengthen the business environment and the investment climate through regular policy dialogue and ambitious performance indicators”, a statement released by the EU said.
It is expected that the main objective of the programme will be to promote domestic and foreign private investment which in turn should attract more Foreign Direct Investment (FDI), enable businesses most especially Small and Medium Enterprises (SMEs) spearhead economic transformation and create employment for the teeming unemployed youths.
According to the World Bank, in 2017, Ghana’s inflows of FDI were US$3.255 billion making the country among the highest receivers of FDI in the world. Assessed by commitments rather than actual inflows, Ghana did even better, attracting intentions to invest to the tune of some US$6 billion, the highest level recorded by the country since it liberalized its investment code in 1995.
Regardless of these financial inflows into the investment and job creation sectors as well as major sectors of the economy, unemployment still remains high and some experts have questioned the actual support granted to Ghana as against the “real amount” invested into projects.
According to Trading Economics, unemployment rate in Ghana increased to 2.40 percent in 2017 from 2.30 percent in 2016. Unemployment Rate in Ghana averaged 5.41 percent from 1991 until 2017, reaching an all-time high of 10.40 percent in 2000 and a record low of 2.20 percent in 2013.
The EU is remains Africa’s first partner in trade and foreign investment. According to the Union, it has committed about €323 million in three major priority areas which are governance, agriculture and employment and social protection.
The EU’s investment stocks represent 40 percent of FDI in Africa and the continent receives an average around €22 billion in EU Official Development. The EU’s cooperation with Ghana is being adapted to the specific needs of an aspiring Middle-Income Country (MIC), which continues to face challenges to deliver basic social services and build institutional capacity.
Cooperation between Ghana and the European Union came into existence after the first Lomé Convention in 1975 – an economic partnership and integration agreement. Since then, the two parties have enjoyed fruitful economic cooperation. Over the years, the partnership has improved and strengthened with successive agreements.
By Dundas Whigham