President Akufo-Addo, has already nominated 36 ministers, awaiting parliamentary approval to hit the ground running.
What’s before the new administration is an economy which some believe is a ‘strong economy’ as claimed by the former finance minister Seth Tekper, whereas other dispute greatly
“The economy is bleeding seriously” stressed by senior minister-designate, Yaw Osafo Marfo
Information available details the economic situation Akufo-Addo’s administration stands to inherit.
Ghana, with a population of over 26.9 million, currently has a Gross Domestic Product (GDP) of $38 billion.
Economically, it grew by 4 per cent in the third quarter of 2016 higher than 3.5% during the same period in 2015, this is data from Ghana statistical service
For the year 2016 “the overall GDP growth could be below the 3.9% growth in 2015 due to problems in the oil sector” a World Bank report states.
The report further predicted 7.5 per cent growth through 2017 to 2018 “if fiscal consolidation program remains on track and technical problems in the oil and gas sector are resolved”
Ghana which is under the International Monetary Fund (IMF) austerity program, still finds it difficult to stay within agreed set targets with the Fund.
By July 2016, revenue shortfall amounted to over GH¢2 billion. The end year target of 5 per cent was reached in July with a deficit of GH¢8.3billion. By September 2016 the deficit had reached 5.9 per cent against a target of 5.2 per cent of GDP.
Moreover, the country’s debt stock keeps rising far beyond target of 66% debt to GDP ratio.
The debt rose to $28.3 billion by September 2016, representing 72 per cent of the country’s GDP, data from Bank of Ghana (BoG) indicates.
While the cedi is still struggling against major currencies depreciating almost 5.9% to the dollar in 2016. Other economic indicators are far beyond government target as well
In 2016, Inflation saw it highest rate at 19.2 per cent in March. This eased gradually to finish the year at 15.4 per cent, the lowest in over 2 years. And yet is nowhere closer to the BoG’s inflation target of eight per cent plus or minus two percentage points.
Surprisingly, Ghana now leads in the world with the highest benchmark rate at 25.5 percent, a drop from 26 percent in November after holding it for nearly a year.
This has resulted in high lending rate among banks in the country.
Macroeconomic and financial data from the BoG showed that the average lending rate in the banking industry is at 33 per cent, which is one of the highest in the region.
Over 12 banks charge interest rates equal or above the average lending rate with about 7 of them lending above 35 per cent per annum.
This high interest rate regime has deepened the challenge for most businesses especially SMEs, to access credit and expand.
According to experts, the situation has contributed largely to the growing unemployment rate in Ghana.
Over 48 per cent Ghanaian youth is unemployed. This was revealed in a World Bank report dubbed ‘landscape of jobs in Ghana’
It’s not surprising 43 per cent of Ghanaians cited unemployment as top priority to be addressed by the incoming government in recent CDD-Ghana survey.
Agriculture employs many Ghanaians, yet growth continue to decline year-on-year, engendering high rise in import of food items. Over $2.1 billion worth of food stuffs were spent on importation of basic food items.
By the third quarter of 2016, Agricultural growth rate was at 2.3% year-on-year, unlike the service sector which now contributes more than half of Ghana’s GDP and growing at 4.7%
Other sector which got a boost is the energy sector. Conditions have been very much stable for months now.
This is largely due to various power deals and projects which have increased the national power generation mix. Electricity now reaches some 80 percent of the country’s population
According to Volta River Authority (VRA), Ghana’s total installed capacity is 3,644 MW as at December 2016, with hydroelectricity and thermal power dominating the generation mix.
Renewables energy, though has been targeted to reach 10 percent is still less than 1 percent in the country as at the close of the years 2016.
With an economy poised to hit over 7 per cent growth, what it deserves are policies that align development in all sectors of the economy to improve personal economies of Ghanaians. The incoming administration has a lot to proof and many hurdles yet to cross.