Business News of 2014-06-12

World Bank cautions government

The World Bank has warned Government to stop excessively focusing on the oil sector at the expense of other sectors of the country’s economy, particularly the manufacturing sector.

According to the bank, the manufacturing sector’s contribution to Ghana’s Gross Domestic Product (GDP) over the past few years has declined as a result of inadequate attention and investment by government.

The Country Director of World Bank Ghana, Yusupha B. Crookes, who disclosed this on Tuesday in Accra at a workshop in Accra dubbed, ‘Ghana Manufacturing Competitiveness: Dissemination Workshop For Economic Work,’ also stressed the need for government to prudently invest in the manufacturing sector to provide jobs for the numerous unemployed youth.

“Ghana is facing one major challenge. And that is how to foster productivity in the non-petroleum sector of its economy,” he said, adding that “manufacturing in Ghana has stagnated over the past few years as Ghana has grown.”

He called for the diversification of the country’s economy.

“Ghana’s oil production is expected to peak around 2020 and so is government revenue,” Mr. Crookes noted, adding “but there is the need for government to focus on other areas apart from the oil sector because oil price on the world market is largely subject to fluctuation.”

According to him, “Ghana ranks high around the world when it comes to good business environment. It has done well over the years in terms of growth and development. But what is missing now is the momentum to sustain its growth and move forward due to the fact that government has become more complacent with the growth rate.”

“In the next decade properly by 2030, the government must be able to provide 6 to 7 million new jobs from the manufacturing sector, Mr. Crookes noted.

Meanwhile, Kofi Afresah Nuhu, Director of Manufacturing at the Ministry of Trade & Industry, has indicated that the manufacturing sector was facing some challenges.

According to him, the output of the wood and textile industries had declined.

“The wood industry has lost about 200,000 jobs and still struggling to save another 5,000 jobs,” he said.

He said the Trade Ministry, as part of plans to revive the manufacturing sector, would invest GHC60 million in the pharmaceutical sector this year, adding that other sectors such as the poultry, agribusiness would see significant investments as well.

Felix Oppong, an Economist at the World Bank’s Poverty Reduction and Economic Management Division, in a presentation titled, ‘Long run growth and productivity in Ghana,’ said government’s expenditure over the last three decades had increased exponentially.

According to him, the economy would continue to rely on natural resources with low complexity.

Source: Daily Guide
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