Four per cent GDP target not likely

Targeted real Gross Domestic Product (GDP) of four per cent for this year is unlikely to be met in view of the September 11 events in the United States and their effects on emerging economies, Dr Joseph L.S. Abbey, Executive Director of the Centre for Policy Analysis (CEPA) said on Thursday.

He said this stemmed mainly from an expected steep decline in revenue from tourists from the US, Europe and other areas of the globe who would have arrived in the country, but might now stay at home or change their plans completely.

Dr Abbey was speaking at a luncheon by the Ghana National Chamber of Commerce and Industry (GNCCI) in Accra.

He said Japan, a major development partner was already going through a recession and the September 11 events in the US were in the process of triggering a world wide recession, which would affect the ability of these countries to meet the development needs of emerging economies.

To reduce the impact of the changes that would be taking place from now, Dr Abbey called for a radical change to the country's agriculture and education policies

" We must take advantage of the technologies that modern education brings to bear on agriculture. Water systems must be managed to move agriculture from the gains or losses of the weather to the full potential that sophisticated equipment can offer".

Farmers, he said, must as a matter of necessity have increased access to credit to make their operations less stressful and to encourage more people to go into agriculture.

He praised government for its decision to be firm on the monetary and fiscal fronts, stressing: "It is important the government is not rushed to ease up on things now."

Dr Abbey said he was, however, apprehensive about the usual trend of the last three elections - huge spending by government in election years- being repeated.

Dr Abbey was good for government to keep a tight lid on its expenditure but questioned what effect this might have on payments and arrears of payments due district assemblies, suppliers of items to schools, hospitals and prisons.

He also expressed concern about the delays in transfer of the 2.5 per cent Value Added Tax (VAT) to the Ghana Education Trust Fund, saying arrears for last year must be met.