Latest International Monetary Fund (IMF) report has rated Ghana as the fastest growing economy in the world. While this is the case for Ghana, IMF notes that many other African countries lag far behind.
IMF predicts that Ghana’s economy will grow at 8.8 percent in 2019, a growth rate it says is the fastest in the world. IMF attributes the projections to Ghana’s improved macroeconomic performance for the last two years and the strong economic growth in 2018 .Last year, Ghana’s economy grew by 5.6 percent, putting it in sixth position.
Ghana is closely followed by its neighbor Ivory Coast with 7.5 percent, and Ethiopia with 7.7 percent. The growth rate of these two countries from 2018 to 2020 appears to be consistent, while Ghana’s growth is predicted to decline again in 2020.
Apart from Ghana and Ivory Coast, South Sudan, Rwanda, Ethiopia, and Senegal, also top the list of the fastest growing economies in the world according to the IMF report.
While oil is said to be the sector that is driving Ghana’s economy, other sectors like agriculture, manufacturing and services have shown positive growth. This is according to one Adu Owusu Sarkodie from the University of Ghana. He however still maintains that the main source of growth is the oil sector. “We have discovered new oil fields and companies have started operating, they have intensified their operations,” he said in an interview with DW.
Papa Ndiaye, Head of the Regional Studies Devision at the IMF’s African Department had dissenting views regarding Ghana’s growth rate. “We don’t expect this growth rate (of 8.8 percent) to be sustained over the medium term. And when you look at it in per capita, that is still smaller than what countries like China have experienced in the past.” Ndiaye said adding that Ghana’s economic growth is expected to slow to a level of around 4.5 to 5 percent.
One Neville Mandimika, an analyst with the Rand Merchant Bank is also of the view that IMF’s projection is “way too generous”.
The Nana Akufo-Addo-led state has a thriving agriculture sector. Not long ago, 200,000 farmers received improved seeds and fertilizers hence increased yields. The sector remains a major backbone of Ghana’s economy. According to Agriculture Minister Owusu Afriyie Akoto, the backup given to the sector has given itva major boost. “We are expecting a bumper crop because of the impact that this great program has had on agriculture, even in its infancy,” he said.
In the IMF list, Angola came last on the list of African countries and economic growth rate has been predicted to be 0.4 percent. Last year it suffered a decline of 1.7 percent. South Africa’s growth rate has been projected to be only 1.2 percent, an increase of 0.4 percent from that of 2018. Resource-rich Nigeria will have a growth rate of 2.1 percent according to the report.
Innovation’ is viewed as a key driver of economic growth. Economists say the development and use of innovations enables firms to increase their productivity, which in turn leads to higher Gross Domestic Product (GDP). Ghana is keen to boost technological innovations and get more young people involved in sustaining and improving the country’s economic performance.
Innovation is especially key for low-income countries. It has been debated before that without innovation, low-income states will not move away from low-productivity.
Ghana has experienced significant economic growth and is now categorised as a low-middle-income country but until recently it was ranked a low-income country.
Featured Image Courtesy: Nomad Africa Blog
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