Economic consultant pessimistic about Ghana's economy

The Executive Director of the Centre for Policy and Economic Analysis (CEPA), Dr Joe Abbey said on Tuesday that the Ghanaian economy cannot support the minimum GDP growth rate of at least seven per cent a year as envisaged in the Vision 2020 document.

"The Ghanaian economy is simply not big enough, by itself to assure such minimum GDP growth rate," he told the Institute of Bankers in Accra. Dr Abbey was delivering a paper on "Foreign Exchange Management and Stability of the Cedi -The Role of the Banking Industry," at the Institute's annual conference.

He said the structure of production, consumption and the low level of technological advancement indicates that, Ghana would continue to import most of her raw materials, technological know-how and educational materials to upgrade the technical and managerial capabilities of its human resource needed to ensure a private sector led growth.

To sustain these programmes, however he said, depends on the development of the requisite export earning capability, especially in the non-traditional export sector. Dr Abbey said annual growth rates of at least 15 per cent in earnings in the non-traditional export sector would make the goals achievable and lay a firm basis for the attack on poverty.

He said inconsistency in macro-economic policy has led to loss of international trade competitiveness and growth in imports to the detriment of the domestic competing industries. Dr Abbey advocated consistent macro policies and appropriate regulatory framework to ensure sustainable growth through productivity.

Such policies will improve risk management and allow for gradual dismantling of capital controls and the development of more resilient and competitive financial and corporate sectors.

On investment, Dr Abbey underscored the need for a growth enhancing investment that would assure the productive potential of the economy and create employment. He urged the banks to be at the forefront of the mobilisation of savings and channelling of investment resources.

Dr Abbey said while financial savings from banks could be transferred to alternative uses, such as consumer credit, industrial investment credit and public sector borrowing, the balance of the use of these savings choices would determine the kind of society and economy.