Structural Adjustment Programme Has Improved Economy Study

Accra, (Greater Accra) 10 Nov.,

The Ghanaian economy has seen a dramatic improvement, relative to her immediate past, since the introduction of the Structural Adjustment Programme (SAP), a study has shown. However, the improvement has not been translated into high rates of growth necessary to re-establish Ghana as a rapidly growing export-oriented country. The study was conducted in 1996 by the U.K.-based Centre for the Study of African Economies. It focused on two problems - failure to achieve macroeconomic stability and effects of the trade and financial liberalisation measures. The study said inflation was twice reduced to 10 per cent but was not sustained while budget deficit was reduced initially but allowed to expand again towards the latter part of the year. The study attributed the inability to sustain macroeconomic reform to weakness in growth of exports. ''Research on the manufacturing sector in Ghana shows that manufacturing firms have not moved substantially into exporting. ''Indeed, the evidence from the survey strongly suggests that the only sector which is export-oriented is thawwood-processing sector''. It said the reasons why the growth of labour-intensive manufacturing has been so limited, is the subject of current research, with several possible answers coming up. This includes the fact that the most profitable export opportunities are still concentrated in the natural resource sector. The other reason is that labour productivity is so poor that although wages are very low, labour is not cheap once allowance is made for low productivity. Research on the labour market, according to the Study, indicate that the long-run falls in real wages have continued in the recent past. These falls are due to the limited extent of investment in the manufacturing sector. ''Unemployment is not growing, but workers are being absorbed into more labour-intensive industries at lower real wages.''