The cost of environmental degradation to Ghana’s economy, has been estimated at $6.3 billion or 10.7 percent of the country’s GDP in 2017, by the World Bank.
The cost of environmental degradation (CoED), the World Bank notes, estimates the effects of environmental degradation on the country due to air and water pollution, agricultural land degradation, deforestation, illegal mining, overfishing, coastal erosion, and flooding.
In addition, it estimates the impact of environmental degradation on the global community, through the cost of carbon emissions from economic activities.
In the report dubbed “Ghana Environmental Analysis Report,” the World Bank posits that, air pollution has the most significant cost – $2.5 billion or equivalent to 4.2 percent of GDP – to the country, followed by water pollution, gold mines, agricultural land degradation and deforestation.
“Air Pollution is the most significant cost (equivalent to 4.2 percent of GDP). This is primarily due to the impacts caused by household air pollution (causing about 8,800 premature deaths), and secondarily by ambient air pollution (about 7,200 premature deaths) in rural and urban areas.”
“Water Pollution causes significant damage – $1.8 billion or equivalent to 3 percent of GDP – due to the health effects of an inadequate water supply, poor sanitation, and inadequate hygiene (about 10,600 early deaths), as well as discharge of solid waste, industrial effluents, and toxic substances into water systems.”
“Agricultural land degradation, deforestation, and overfishing are noteworthy due to their negative effects on resource productivity—impacting national economic growth drivers, jobs, and livelihoods—and ecosystem services,” stated the World Bank.
Adding CoED to Ghana’s economy has almost tripled over the years.
According to the World Bank, its analysis of the Cost of Environmental Degradation, uses a six percent discount rate and a time horizon of 30 years with the results expressed in absolute terms (US$, 2017 prices) and relative terms (as a percentage of Ghana’s 2017 GDP, which was US$59 billion) to benchmark the extent of damage against macroeconomic indicators considering both anthropogenic and natural factors.
It further notes that, its assessment looks at damages at three levels: social, such as morbidity and mortality due to air and water pollution; economic, including lost agricultural productivity due to soil erosion and lost fishing rents due to overfishing; and environmental, such as reduced value of watershed services due to deforestation.
Meanwhile, the World Bank Group (WBG) has said, the unsustainable management of Ghana’s natural resources by government if unchanged, is likely to lead to wealth destruction in the long term.
The World Bank asserts that, the destruction of wealth generated from natural resources will result in the country’s inability to sustain the economic growth it has enjoyed from its natural endowments for the past two decades.
“If its current unsustainable natural resource management remains unchanged, Ghana will see its wealth destroyed over the long term with less opportunity to sustain growth and share prosperity,” stated the World Bank.
