The World Bank’s preliminary findings on Ghana’s Systematic Country Diagnostic (SCD) have indicated that her target to double per capita GDP by 2024 is not realistic.
The SCD aims to contribute to the strategic decision making to achieve rapid growth that is poverty reducing and enhancing shared prosperity.
The findings show that doubling GDP per capita growth over the next eight years is unlikely as it would require per capita growth rates of around nine per cent.
To maintain such high levels of GDP per capita growth, the country needs to strengthen contributions of total factor productivity (TFP) and human capital in the growth process.
However, the Bank notes that the country’s projection provides a guide post of the level of ambition in the country, which is an important factor to pool resources and energy for development efforts.
The SCD informs and precedes the new World Bank Group Strategy in Ghana – called Country Partnership Framework – which is due in Fiscal year 2019. The aim of the SCD is to identify the most important challenges and opportunities Ghana faces in advancing towards the World Bank’s twin goals.
In 2013, the World Bank Group adopted two new goals to guide its work: ending extreme poverty and boosting shared prosperity.
More specifically, the goals are to reduce extreme poverty in the world to less than 3 percent by 2030, and to foster income growth of the bottom 40 percent of the population in each country.
Historical growth rates since the 1990s have on average never reached rates higher than 5.0 percent (over the 2005/12 period).
After decades of stagnation, growth and poverty reduction have intensified in the 1990s, but the growth elasticity of poverty has declined since.
The finding calls for a more quality labour-intensive growth which is needed to bring the economy back on track to continue its impressive poverty-reduction trend.
It also observed that while most Ghanaians work, either in formal or informal sectors, their employment circumstances however does nothing to lift them out of poverty.
Government’s regulatory effectiveness has been declining since the 2000s in a way that now appears to constrain the future development path.
The SCD suggests that a pathway for the development of the country in the future is to provide efficient public services.
In support of the government’s program development, the SCD is expected to explore ways to reinvigorate and sustain growth, poverty reduction and advancing shared prosperity.
This is appropriate since the current state of the economy is unlikely to continue to deliver the fast rates of poverty reduction seen in the past.
On the micro level, the SCD will look at the inputs needed to kick start each identified pathway; on the macro level, the SCD will explore the policy side and the enabling environment for each pathway to work for the people.
The Government’s new coordinated program strives to create opportunities for all Ghanaians; to safeguard the natural environment and ensure a resilient environment; to deepen governance, to fight corruption and enhance public accountability to maintain a stable, unified and peaceful Ghana; and to create a competitive business environment to build a strong and resilient economy.
By Joshua W. Amlanu