The World Bank Group (WBG) has said, the unsustainable management of the country’s natural resources by government if unchanged, is likely to lead to wealth destruction in the long term.
According to the World Bank, the destruction of wealth generated from natural resources will result in the country’s inability to sustain the economic growth enjoyed from the country’s 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.
The Bretton Wood Institution in an environmental analysis report on the country, stated Ghana has managed remarkable success in economic growth since 1990 with real GDP more than quadrupling due to exports of natural resources.
“Strong economic growth has been driven in part by higher prices for Ghana’s main commodity exports, gold and cocoa, and the start of commercial oil production in 2011.”
“Gold, oil, cocoa, cashew, and manganese combined for 84 percent of Ghana’s 2017 $17.1 billion export total. This fits an overall trend that has seen natural resource rents as a percentage of GDP more than double between 1990 and the present; approximately one-half of these rents come from non-renewable sources (oil, mineral, and natural gas),” stated the Bank.
In the report dubbed “Ghana Environmental Analysis Report,” the World Bank further posits that, Ghana’s growing environmental unsustainability may impair its economic growth.
“Environmental unsustainability may impair Ghana’s economic growth, as demonstrated through two economic indicators. The first is national wealth a gauge of growth sustainability which measures a country’s assets in produced, natural (renewable and non-renewable), and human capital, and net foreign assets,” read parts of the report.
Adding that, between 2000 and 2014, Ghana saw total national wealth more than double with growth predicated on efficiently and sustainably managing natural capital.
“Much of Ghana’s wealth increase came with losses to renewable natural resources and overreliance on non-renewable assets. Per capita non-renewable natural capital—mainly from petroleum production—increased substantially from a very low base (US$36 to US$1,673).”
“In contrast, renewable natural capital per capita decreased more than seven percent, with specific declines in forests and protected areas assets. In Ghana’s case, not only was renewable natural capital eroded, but produced capital was as well . Ghana’s high population growth makes this a pressing concern since existing capital stock must be shared with the younger generation and future generations,” the report further read.
The World Bank’s report looks at the various environmental degradation in the country in the form air pollution, water pollution, land degradation among others and the associated costs to the economy.
