Professor Godwin Bokpin, an economist with the University of Ghana (UG) has made some comments with regards to President Akufo-Addo’s economic growth projection of 5 per cent for this year.
Giving his first State of the Nation Address (SONA) in his second term, the President noted GDP growth is expected to rebound strongly this year to nearly 5 per cent, above the IMF’s 2021 January projection of 3.2 per cent growth for Sub-Saharan Africa in 2021.
The projection by government goes above GDP growth projections made by the World Bank and the IMF as well as international credit rating agencies such as Fitch Ratings and Moody’s.
Moody’s, Fitch Ratings and the IMF have all projected a 4 per cent GDP growth for 2021 – excluding the World Bank which projected a 1.4 per cent growth for Ghana.
Admitting that the President’s growth projection is realistic, Professor Bokpin however, raised questions as to what factors are going to drive the anticipated growth projection.
“What kind of recovery is it going to be, what job opportunities will come along with the growth and how inclusive will it be. Will it tackle inequality and yes we know the vaccines will play a role but what are the other drivers of the growth and how sustainable will the growth be,” Professor Bokpin quizzed.
Ghana’s overall economic growth rate for 2020 on the back of the Covid-19 pandemic, was revised downwards from 6.8 per cent to 0.9 per cent. The non-oil economy was also revised from 6.7 per cent to 1.6 per cent.
Revenue shortfall was estimated at GH¢13.5 billion, with additional expenditures related to stemming the tide of COVID-19 estimated at GH¢11.8 billion, with the combined effect amounting to GH¢25.3 billion, or 6.6 per cent of GDP.
The resultant fiscal deficit for 2020 was, thus, revised from 4.7 per cent of GDP to 11.4 per cent of GDP, this was done to reflect the impact of the pandemic. The fiscal responsibility rule of keeping a deficit within a threshold of 5 per cent of GDP was also suspended in 2020 to enable fiscal operations accommodate the impact of the pandemic.
