Despite the dwindling fortunes of agriculture since the start of commercial oil production some six years ago, the dreaded oil-linked Dutch disease has not set in, Finance Minister, Ken Ofori Atta has assured.
Dutch disease references problems associated with a rapid increase in the production of natural resources, such as oil and gas, that cause a decline in other sectors of the economy; such that when the resource runs out, the economy becomes worse off.
Mr. Ofori-Atta, asked by the B&FT if the Dutch disease had caught up with the country – given the dwindling contribution of agric to Gross Domestic Product (GDP) – said: “The Dutch disease has not set in. The Dutch disease shows up in two key areas: an appreciation of the domestic currency and movement in the factors of production from the traditional sectors to the ‘new resource sector’. Neither of these has happened.
“In the first instance, the increased forex inflows lead to a strengthening of the local currency. Nigeria experienced this in the 1970s, leading to the non-competitiveness of its agriculture sector, with groundnuts and cocoa production and exports being worse affected. The cedi has been depreciating since 2011, so this obviously does not apply to Ghana.”
The economy grew by 8.5 percent in 2017 – the highest since 2012 when it grew by 9.3 percent, figures released by the Ghana Statistical Service (GSS) for quarter four of 2017 have shown.
Despite the dwindling fortunes of agriculture since the start of commercial oil production some six years ago, the dreaded oil-linked Dutch disease has not set in, Finance Minister, Ken Ofori Atta has assured.
Dutch disease references problems associated with a rapid increase in the production of natural resources, such as oil and gas, that cause a decline in other sectors of the economy; such that when the resource runs out, the economy becomes worse off.
Mr. Ofori-Atta, asked by the B&FT if the Dutch disease had caught up with the country – given the dwindling contribution of agric to Gross Domestic Product (GDP) – said: “The Dutch disease has not set in. The Dutch disease shows up in two key areas: an appreciation of the domestic currency and movement in the factors of production from the traditional sectors to the ‘new resource sector’. Neither of these has happened.
“In the first instance, the increased forex inflows lead to a strengthening of the local currency. Nigeria experienced this in the 1970s, leading to the non-competitiveness of its agriculture sector, with groundnuts and cocoa production and exports being worse affected. The cedi has been depreciating since 2011, so this obviously does not apply to Ghana.”
The economy grew by 8.5 percent in 2017 – the highest since 2012 when it grew by 9.3 percent, figures released by the Ghana Statistical Service (GSS) for quarter four of 2017 have shown.