<<Print>>The World Bank has predicted that Ghana’s economy will experience some moderate growth this year. This is not the first time the World Bank is making such a prediction. In October 2015, it made a similar projection.
The World Bank attributed increased investor confidence, oil production from new oilfields and solution to the country’s energy crisis as the main reasons that will propel Ghana’s growth this year.
The World Bank made the revelation in its Group report dubbed Africa Pulse. According to the report sub-saharan Africa will grow by 3.3 percent this year. Despite the 3.3 percent projected, the World Bank believes the figure will improve in 2017 and 2018. It projects that for 2017 and 2018, growth will go up by 4. 5 percent on average. According to the World Bank the projected pickup in activity in 2017 to 2018 reflects a gradual improvement in the region’s largest economies like Angola, Nigeria, and South Africa as commodity prices stabilize and policies become more supportive of growth.
However Sub-Saharan Africa will continue to face low and volatile prices in global commodity markets. Acting Chief Economist for the World Bank Punam Chuhan-Pole who delivered the report asked African countries whose revenue have plunged due to falling commodity prices, particularly oil and gas, to consider reforms that will unleash their growth potential. “I think it is important to look at some of the policy challenges that the region is facing, there are the short term that the region can sustain itself in terms of the drop in commodity prices especially oil but also other commodities at least to be a short practice that is likely to persist for some time … and countries need to address the economic capabilities and source for sources of sustainable and inclusive growth,” she observed.
Punam Chuhan-Pole added,”Very importantly, there is the need to build buffers to rationalize government’s expenditures and wage bill and strengthen public financial management and also improving the quality of spending public investments … for most countries in the region, they also need to strengthen domestic resource mobilization, the strength of taxes collected is quite low and it is important to increase the tax contribution of the non –resource sector and to widen the tax base as well as strengthen tax administration and streamline taxes.” Meanwhile the bank says the plunge in commodity prices particularly in oil, which fell by 67 percent from June 2014 to December 2015 and weak global growth, especially in emerging market economies, are the reason for the region’s uninspiring performance.
In several instances, the adverse impact of lower commodity prices was compounded by domestic conditions such as electricity shortages, policy uncertainty, drought, and security threats, which stymied growth. But the report also paints some bright prospects despite the gloomy one earlier. It reveals some bright spots where growth continued to be robust such as in Côte d’Ivoire, which saw a favorable policy environment and rising investment, as well as oil importers such as Kenya, Rwanda, and Tanzania.