Former Minister for Finance, Seth Terkper, has aired his thoughts on the possibility of attainment of a 5 percentage points Gross Domestic Product (GDP) growth projection for the Ghanaian economy this year.
President Akufo-Addo delivering his first State of the Nation Address (SONA) in his second term, asserted that the Ghanaian economy is expected quickly rebound from the Covid-19 pandemic and grow at a rate of 5 per cent this year.
The president attributed the expected rebound and growth of the economy to the gradual pick up in economic activities which is to be further boosted by the Covid-19 vaccination exercise coupled with government’s implementation of some economic stimulating programmes such as the Ghs 100 billion Obaatanpa Ghana CARES Programme.
Reacting to the president’s GDP growth forecast, Mr Terkper in an interview with norvanreports stated the attainment of the said growth rate is dependent on both domestic and external factors.
According to him, high demand for commodities by advanced economies is what influences and accelerates economic growth of developing countries and as such factors such as the Covid-19 pandemic which is inhibiting demand for commodities by advanced countries from developing countries like Ghana, can inhibit the country’s ability to achieve the set growth rate.
On the other hand, a successful vaccination programme both in the country and across the globe will restore demand for commodities by advanced countries and supply from developing countries thereby enhancing and accelerating growth prospects of the country.
“It is not necessarily that the 5 per cent growth rate can be achieved this year because you are taking about factors beyond your control just as Covid-19 was also beyond our control, but which affected us because demand from advanced countries fell and when demand falls it affects the economy. So just as an economic downturn can affect you for your commodity supply to go down, forex will also go down and then you begin to have foreign exchange reserve problems, shortage of money for imports, low revenue to the budget, etcetera etcetera.”
“And as we are now recovering from Covid, if the vaccines work, the global economy will recover and commodity prices will go up again and when that happens, your economy will bounce back and then you can achieve your 5 per cent, so it’s both domestic and external conditions,” he stated.
Ghana’s economy for the second and third quarters of 2020 contracted by 3.2 per cent and 1.1 per cent respectively due to the impact of the Covid-19 pandemic – data on fourth quarter growth is yet to be released by the Ghana Statistical Service (GSS).
The president’s growth projection for the year is a little above the International Monetary Fund (IMF) and Moody’s growth projection of 4 per cent.
The World Bank has however, projected the economy to grow by some 1.4 per cent this year.
