"Economy Runs Risk of Underperforming" - World Bank

The World Bank Country Assistance Strategy Report for 2000-2003 says the economy runs the risk of "under-performance" relative to the rates of growth and poverty reduction in the medium term.

The Report, which was made available to the NH, noted that better rates could only be achieved with the right environment, stronger fiscal performance, more attention by the government to the task of ensuring equitable development.

Economic observers and analysts also indicate that with the continuing spate of unfavourable import prices and low market prices of export commodities, a dull and drab growth session will be experienced over the period.

Insufficient strong fiscal performance, the Report notes, would mean that the enabling environment for the private sector would remain problematic and the financial system would have little incentive to increase private lending.

"Slow progress on incorporating private sector participation in infrastructure could mean that Ghana would continue to suffer from critical infrastructure bottlenecks, thereby discouraging private investment limiting Ghanaians' access to safe supply of water and electricity."

The Report said government's ability to manage unfavourable changes in commodity prices as is occurring now is limited, leaving Ghana vulnerable to periodic external shocks.

The report, which was prepared just before the 2000 elections, said with the background of a difficult external environment, "it is important that the Bank continue its close involvement with Ghana and encourage the government to take the necessary actions to speed growth and poverty reduction."