President Kufuor Is Dreaming.....

......PER CAPITA INCOME OF $1,000 FARFETCHED

THE Institute of Economic Affairs (IEA) has expressed doubt about the ability of Ghana to attain a per capita income of $1,000 in the next 10 years.

It said a careful study of the level of growth makes the target "in no uncertain terms, over-ambitious".

Dr Robert Osei, an economist and Fellow of the IEA, expressed the doubt in an interview on the possibility of Ghana attaining a $1,000 per capita income in the face of the slow growth rate of the economy.

He said although it is not wrong for the government to aim high, it has to be realistic in setting such targets as it affects the credibility of Ghana's development plans.

He stated that "the projections suggest that this will be an almost impossible target to achieve".

Assuming the total population of Ghana remains at the current level of about 19.7 million over the next 10 years, the annual average growth rates would have to be about 11 per cent over the same number of years, Dr Osei observed.

From this scenario, he said this "implicitly suggests that the natural rate of increase, that is, the population growth rates, should average zero which is an unrealistic assumption to make".

Dr Osei said relaxing the zero annual average growth in population and making the assumption that the population growth rate averages about one per cent over the 10 years, then total population will be about 21.8 per cent in 2014 and for this population, output growth will have to average about 12 per cent annually.

He also said if Ghana were to assume an average of about two per cent population growth rate per annum, the total population in 10 years would be about 24 million, meaning the country will have to achieve an average annual output growth of about 13.3 per cent in order to attain a per capita GDP of about $1,000 over the period.

Dr Osei said Ghana's population is growing at an estimate of about 3.5 per cent and if it were to grow at an impossible one per cent at all, sectors such as agriculture, industry and services should also grow at 11.1, 11.8 and 11.8 per cent respectively.

The IEA economist said over the 10 years that preceded 1980 when Botswana exceeded the $1,000 mark in per capita GDP, its annual average growth in agriculture, industry and services were respectively 8.3, 21.4 and 11.6 per cent.

He said gross domestic investment averaged over 41 per cent of GDP, adding that although their population growth averaged about 3.5 per cent, the total population as of 1980 was still less than one million and that even with this very low population density, average annual growth over that period exceeded 15 per cent for Botswana.

In the case of Ghana, he said it unfortunately does not have that luxury of low population density. Dr Osei said it is therefore difficult to see how Ghana could achieve the necessary growth rates to enable it to attain a per capita GDP of about $1,000 in 10 years.

Ghana Poverty Reduction Strategy (GPRS) will average about 4.9 per cent over 2003-2005 and indicated that after 2005 GDP growth rate should average close to 15 per cent to enable it to achieve what he described as the enviable level of $1,000 in per capita GDP.