An Overview of the Economy in 2011

The Institute of Economic Affairs (IEA) in its statement on state of the Ghanaian economy recently, observed that the economy in the first half of 2011 was kind of mixed.

It said real GDP declined in the first and second quarters largely due to seasonality, but year on year growth in both quarters was quite strong.

The IEA said the key drivers of year on year growth were the mining sector (dominated by new oil) and crops production (dominated by cocoa).

The review focused on economic growth, prices, the fiscal and the external sectors and noted Ghana's economy had been described as the fastest growing economy in the world currently, with new oil production as the main driving force.

The Minerals Commission have indicated that over the years the districts assemblies have not been able to provide any evidence as to how the funds from royalty have been utilized.

The commission indicated that some of the assemblies have used the money for their recurrent expenditure, whereas the money is for development of the districts. Development projects such as education infrastructure and services, social infrastructure, health infrastructure and services, among others.

Land acquisition frustrates investment, says UN-HABITAT Report

Many investors have had to abandon their project in Ghana and the sub region due to the cumbersome process they had to go through in acquiring land for their project.

Land tenure system had been a major worry to many local and foreign private entrepreneurs as a result of the difficulty in getting access to land as well as the registration process they had to go through.

This is said to be the result of retarded growth of the private sector in the country and it is also evident in many other countries in the sub-region.

The UN-HABITAT 2010 Global Report on the state of African cities mentions the structure of the urban land market and prices as a major problem of nations in the sub region as governments finds it difficult to release lands for urban development due to the influence of traditional authorities. This has been responsible for the delay in urbanization process of many cities in developing countries.

According to the Report land market and prices are the main drivers of urban development and although there has been some reforms regarding the land tenure system in countries in the sub-region, protection or security of the tenure cannot be guaranteed.

This has been mentioned as a contributing factor to the rising pace of urbanization of cities of the developing countries, the capacity of most countries in the sub-region to manage adequately the challenges associated with urbanization is decreasing.

Africa can generate wealth from slums

....says UN-HABITAT boss

Africa is considered to be one of the fastest urbanizing continents in the world thus the call on African leaders not to see the development of cities in their countries as a challenge but as avenue for wealth creation.

Many developing countries, majority of whom are in Africa are currently confronted with rise in slums in urban cities such that it has been a hard task dealing with the issue since many of the rural dwellers migrate to the city centres daily in search of non-exiting jobs. Africa is considered to be one of the fastest urbanising continents in the world.

Dr. Joan Clos, the Executive Director of UN-HABITAT made this known while addressing journalists at a sub-regional workshop in Abuja.

He encourage authorities in charge to word hard aimed at creating jobs, build affordable houses to increase the wealth of the cities as well as sustaining the wealth generated in the cities.

The provision social amenities such as water, sanitation facilities, health centres, electricity, planning the cities and towns, providing space to the public, creating jobs, providing affordable housing could go a long way to reduce rural-urban migration.

State of the World Population Report

Ghanaians have been advised not to see the increase in population growth as a challenge but must look at the benefits the country could derive from it.

The state of the world population report emphasized, that with proper planning and the right investments in people to empower them to make choices to maximize their welfare and that of others, the world of seven billion could have thriving sustainable cities, productive labour forces that can fuel economic growth, with the youth contributing to the well-being of economies and societies.

The report was therefore a wakeup call for the world to act now to forestall any future disaster.

In light of our population growth there issues that needed to be addressed, these included how to deal with the growing population of young people which is about two billion of the seven billion worldwide, ageing, fertility, migration, urbanization, the environment and how to manage data. The report highlights seven opportunities for the world's seven billion people. They are reducing poverty and inequality can slow population growth; unleashing the power of women and girls can accelerate progress on all fronts; energetic and open to new technologies, you people can transform global politics and culture; and ensuring that every child is wanted and every child birth safe can lead to smaller and stronger families.

Nonetheless, it noted that the spreading growth to other sectors of the economy was the critical challenge to generate jobs to address the huge unemployment problem in the country.

Indeed, there were mixed reactions from the several people Public Agenda spoke to about state of the economy.

While some were positive about the economy, others were skeptical and even questioned the current low inflation rate, stabilization of the cedi and other economic gains, describing them as artificial.

Mr. Jake Mandus, a secondhand car dealer said that business had been very tough this year. "I have lost all my investments through high duty at the ports and low sales. I am even thinking about how to pay my debts."

He pointed out that people do not have enough disposable income to spend on. "When purchases are made it is difficult to retrieve your money."

He expected government to pump more money into the system next year, being an election year, with contractors and institutions receiving monies from government for work done. "With money in circulation we would be able to make up for the lost investments made," he stated.

Madam Barbara Sam-Mensah, a confectionary wholesale dealer at Dansoman, a suburb of Accra, submitted that she was waiting to empty her shop in other to fold up. She said business had been very bad and that she had been accumulating debts. "I can no longer continue to pay for the accumulation of debt on the shop rental and goods purchased for the shop," she noted.

Maa Adwoa, a final year student in one of the tertiary institutions in the country retorted, "For me I do not think Ghana is a middle income country, you just take a look around; how many people can afford three square meals? Many live in abject poverty and we proud ourselves that we are a middle income country".

She said she does not expect the economy to become any better and asked Ghanaians to brace themselves for hard times ahead.

Others were of the view that though it has been said that Ghana's economy was doing well they do not feel it in their pockets. "If it is really true, then I am yet to feel it," said Kwaku, a shoe shine boy.

The following are some highlights of economic events reported on in 2011.

Don't sacrifice economic gains on altar of politics - Dr. Abbey cautions

As Ghana prepares for 2012 election; the government has been cautioned not to erode the economic successes the country had chalked over the last three years.

A renowned economist had mentioned that successive governments had not been able to manage the situation well leading to overspending during the election year thereby eroding economic successes gained. He said governments spend with impunity and without authority from Parliament and substituting national interest with partisanship which often sent the country back. These, he said, were worrying and had raised concerns.

Dr. Joseph Abbey, Executive Director, Centre for Policy Analysis (CEPA) cautioned politicians to be watchful and not to put Ghana's economy in jeopardy otherwise they would be replaced with technocrats to manage the economy.

He recounted that over the year's, macroeconomic outcomes in the aftermath of elections in Ghana had led to the sign up to a stabilization programme with the International Monetary Fund (IMF).

Middle income status: Rough times ahead of Ghana

Though Ghana has been hailed as one of the fastest growing economies in the world, experts say government needs to be cautious in its dealing.

With its current Lower Middle Income Country status, Ghana may not enjoy concessionary loans any more from its development partners and may have to borrow from the world market at a higher interests.

The government has therefore been called on to begin discussions with the World Bank management on the graduation process from a low income country status to that of middle income.

According to experts, the country has to seek clarification on expectations as the country graduates from International Development Assistance (IDA) of the World Bank on how to repay loans which were accessed during the period under IDA and also how to access funds from International Bank for Reconstruction and Development (IBRD). This will enable the country take into consideration the full range of implications and obligations for early repayments and potential for access to IBRD.

African leaders urged to use tax payers' money judiciously

African leader have been accused of being the cause of low tax payment on the African continent. According to experts taxes paid are not used judiciously therefore governments are not able to widen the tax bracket to include the informal sector.

A tax expert in an interview with Public Agenda, noted if citizens realized that the taxes being paid are used for developmental projects in their nations, they would be more willing to pay but when leaders misuse public funds, it is difficult to ask for more

Prince Rasaq Kunle Quadri, the President of West African Union of Tax Institutes (WAUTI), gave this piece of advice after he has addressed a news conference by the Chartered Institute of Taxation - Ghana (CITG) on behalf of WAUTI in Accra.

Prince Quadri said, WAUTI was concerned about the low level of education on taxes in the sub-region. He thought that since taxation was the main source of funding for development projects it was legitimate for citizens to question their leaders about what their monies were used for when they felt dissatisfied

EU commits 3 million Euros to BUSAC Fund

As part of its contribution to the development of the private sector I the country, the European Union signed agreement with the Danish International Development Agency (DANIDA), comitting three million Euros to the Business Sector Advocacy Challenge Fund (BUSAC).

This followed a similar commitment made by the United States Agency for international Development (USAID) and DANIDA to the fund.

The second phase of the project which began last will allow small business benefits from small grants and will also receive support from business service providers I preparing and implementing advocacy actions.

The EU expects small and medium scale business associations to take advantage of the opportunities under the BUSAC Fund to address the challenges they face in doing business to enable them to improve on productivity and advance the advocacy work of SMEs in the country.

DCEs/MCES kick against guidelines for royalty utilization

The Ghana Minerals Commission is proposing giving guidelines to the district assemblies in mining areas as a framework to help district and municipal assemblies properly manage the royalties paid by mining companies to the affected communities for development.

But most District Chief Executives (DCEs) and Municipal Chief Executives (MCEs) in the mining areas are against the proposed guidelines for the use of mineral royalties being put in place by the Minerals Commission.

According to them, they should be allowed to use the funds at their own discretion. This, most Members of Parliament disagree, especially those from the mining areas. They said as Parliamentarians, they are given guidelines as to how they use the funds allocated to them for use in their constituencies, therefore they see no reason why the DCEs/MCEs should kick against it.

The Minerals Commission have indicated that over the years the districts assemblies have not been able to provide any evidence as to how the funds from royalty have been utilized.

The commission indicated that some of the assemblies have used the money for their recurrent expenditure, whereas the money is for development of the districts. Development projects such as education infrastructure and services, social infrastructure, health infrastructure and services, among others.

Land acquisition frustrates investment, says UN-HABITAT Report

Many investors have had to abandon their project in Ghana and the sub region due to the cumbersome process they had to go through in acquiring land for their project.

Land tenure system had been a major worry to many local and foreign private entrepreneurs as a result of the difficulty in getting access to land as well as the registration process they had to go through.

This is said to be the result of retarded growth of the private sector in the country and it is also evident in many other countries in the sub-region.

The UN-HABITAT 2010 Global Report on the state of African cities mentions the structure of the urban land market and prices as a major problem of nations in the sub region as governments finds it difficult to release lands for urban development due to the influence of traditional authorities. This has been responsible for the delay in urbanization process of many cities in developing countries.

According to the Report land market and prices are the main drivers of urban development and although there has been some reforms regarding the land tenure system in countries in the sub-region, protection or security of the tenure cannot be guaranteed.

This has been mentioned as a contributing factor to the rising pace of urbanization of cities of the developing countries, the capacity of most countries in the sub-region to manage adequately the challenges associated with urbanization is decreasing.

Africa can generate wealth from slums

....says UN-HABITAT boss

Africa is considered to be one of the fastest urbanizing continents in the world thus the call on African leaders not to see the development of cities in their countries as a challenge but as avenue for wealth creation.

Many developing countries, majority of whom are in Africa are currently confronted with rise in slums in urban cities such that it has been a hard task dealing with the issue since many of the rural dwellers migrate to the city centres daily in search of non-exiting jobs. Africa is considered to be one of the fastest urbanising continents in the world.

Dr. Joan Clos, the Executive Director of UN-HABITAT made this known while addressing journalists at a sub-regional workshop in Abuja.

He encourage authorities in charge to word hard aimed at creating jobs, build affordable houses to increase the wealth of the cities as well as sustaining the wealth generated in the cities.

The provision social amenities such as water, sanitation facilities, health centres, electricity, planning the cities and towns, providing space to the public, creating jobs, providing affordable housing could go a long way to reduce rural-urban migration.

State of the World Population Report

Ghanaians have been advised not to see the increase in population growth as a challenge but must look at the benefits the country could derive from it.

The state of the world population report emphasized, that with proper planning and the right investments in people to empower them to make choices to maximize their welfare and that of others, the world of seven billion could have thriving sustainable cities, productive labour forces that can fuel economic growth, with the youth contributing to the well-being of economies and societies.

The report was therefore a wakeup call for the world to act now to forestall any future disaster.

In light of our population growth there issues that needed to be addressed, these included how to deal with the growing population of young people which is about two billion of the seven billion worldwide, ageing, fertility, migration, urbanization, the environment and how to manage data. The report highlights seven opportunities for the world's seven billion people. They are reducing poverty and inequality can slow population growth; unleashing the power of women and girls can accelerate progress on all fronts; energetic and open to new technologies, you people can transform global politics and culture; and ensuring that every child is wanted and every child birth safe can lead to smaller and stronger families.