We were immensely surprised as in my circle of Intellectuals as well as citizens of this sovereign nation called Ghana, strike with the news of IMF proposed growth rate of 8.8% as a forecast for Ghana, making the country a fast growing economy in the world in 2019.
This news reached us, as either overrated or an ambitious forecast rating. Strangely in the same report, do further argue that such a growth is not sustainable and the world should again expect a decline of such a growth rate in 2020. I felt the experts need to review the analysis and the interpretation of the panel data once more.
However, Ghana in its current stage, seeking to re-structure it destiny, require not to embrace a fondling data of Outside-in but rather be abrupt to factual to necessitate the honest growth, we aspire for the economy, from Inside-out.
Globally, the three major factors used as indicators for a National Economic growth has been
I. Physical Capital
II. Labour Market
Let statistically examine these three main indicators in respect of Ghana’s Economic growth and judge for ourselves, to define the actions required than political persuasion of the health status of the economy.
I. Physical Capital
The best macroeconomic indicator in monetary terms easy to be used as proxy for physical capital of a nation economy, has been the Country Exchange Reserve. Bank of Ghana report from 2009 to 2018, had on records the average value of Ghana Exchange Reserve, estimated at $4.49 billion, just about 40% of the entire worth of a single Nigerian Entrepreneur Aliko Dangote who is $10.6 billion.
Reminding ourselves also, that Ghana fall on the 106th ranking position of the global fragile State Index and scaled at 68.10. Let further consider the remittance to Ghana in percentage of GDP from 1979 to 2017, it averagely valued at 1.26% from the World Bank report.
Currently the figure is lower than the above quoted percentage because even the Ghanaians in abroad do not have confidence at home anymore to remit. If you are to observe any current significant trend of remittance, the data-point, connect us to transactions within political party faithful’s within home and abroad.
II. Labour Market
According to the World Bank report on the unemployment status of Ghana from 1991 to 2018, it submits that, the average value of unemployment rate was estimated at 5.34%.
With this figure raising statistical concern, the definition of World Bank unemployment status was critically considered, just for the purpose of data accuracy, and it states that, it is the share of the Labour force that is without work but available for and seeking employment.
In respect to this definition, my working data generated a rate of 7.34% above the initial quoted data point, a significant margin that express the true status of Ghana’s economy and it growth direction.
Per the World Bank report from 1960 to 2017 the average value of import percentage of GDP to Ghana was 31.28% and that of Export was 23.32% of GDP in that same period.
This presented a trade deficit of -7.96% against Ghana in GDP percentage. Considering the Economic rules that govern growth of Nations, it empirically establishes that, trade deficit should not exceed the rate of economic growth of 3% in GDP for many years.
With the debt-to-GDP ratio of a country should always fall within (1-3%), since the average economies typically grow at an estimated rate of 2-3% per year.
The summation of my argument from various collection point of data, known to be a global accredited sources, honestly suggest to us, the economy of Ghana is sick and require politicians to be charismatic enough to bring all hands on board to address the challenges than engaging in the media fantasy game.
The danger of such positioning is that, it will finally cause a total crash to the economy of Ghana unrecoverable, until salvaged by a superior economy.
Emmanuel Tweneboah Senzu, Ph.D.
Dean of Research
University College of Management Studies
Frederic Bastiat Institute (www.fbiresearchedu.org)