ACCRA, Aug 2
A leading independent research institute in Ghana has queried the government's ability to hit its target of 5.5 percent economic growth in 1999, and a second research group said the official 1998 figure was unreliable.
The Institute of Economic Affairs (IEA) said in a half-year report that industrial growth was likely to be stronger than in 1998, when drought affected hydro-electric power generation and many companies had to introduce short-time working.
However, growth would de dampened by a decline in the mining sector and low commodity prices in the dominant agricultural sector, IEA economics director B.K. Armah said.
``Based on these trends, the overall GDP growth rate is not expected to exceed five percent,'' he said.
The Centre for Economic Policy Analysis (CEPA) said in a separate half-yearly report that it estimated economic growth was only 2.9 percent in 1998 against the official 4.6 percent.
It said it had particular problems with official data on industrial and agricultural growth.
The government said cocoa output had risen 11 percent in 1998 from 1997, but the CEPA found confusion between output and export figures and said cocoa production fell two percent.
The CEPA also doubted that economic growth would reach 5.5 percent, and both groups said the inflation target of 9.5 percent would be difficult to hit.
Both suspected the Bank of Ghana had been intervening to support the cedi to keep down inflation.
The currency depreciated by only four percent against the dollar in 1998 despite an inflation rate of 15.7 percent. The central bank has denied intervening.
An IEA survey of officially approved forex bureaux showed a shortage of dollars had not translated into any weakening of the cedi. Some bureaux suggested they were under threat of losing their licences if they altered rates significantly.
Evidence for the unrealistic level of the cedi was found in the re-emergence of a black market in which the dollar was 10 percent higher than in banks and forex bureaux, the IEA said.
Both research groups were worried about overspending in the run-up to a presidential election in Ghana due in late 2000 and the CEPA said internal arrears were building up.
