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02.11.2008 Business & Finance

Ghana's GDP underestimated

A World Bank study has indicated that Ghana's Gross Domestic Product (GDP) has been underestimated by about 80 per cent, Dr Anthony Akoto Osei, Minister of State at the Ministry of Finance and Economic Planning, has said.

Addressing a book launch in Accra last Thursday, which was attended by President J.A. Kufuor, Dr Akoto Osei said the bank had requested another study to confirm its initial finding about Ghana's GDP.

The GDP measures the production of goods and services of a country over a one-year period.

The book, titled An Economic History of Ghana: Reflections on a Half-century of Challenges and Progress, was edited by Ivor Agyeman Dua, an author and journalist. Mr Agyeman Dua, who is now the Minister Counsellor at the Ghana High Commission in London, already has six books to his credit.

The book chronicles the economic development of Ghana from independence until now. High profile academics, professionals and ministers, including Jeffery Sachs, Mr Moses Asaga, a former Deputy Minister of Finance and Economic Planning, a former Vice-President, Professor John Evans Atta Mills, and Dr Akoto Osei contributed to the write-up.

Dr Akoto Osei said careful observation of economic trends in Ghana over the last few years indicated that a lot of economic activities that had taken place might not have been captured in the GDP.

He said the economy had been robust but the triple shocker of high prices of oil and food and the global financial crunch implied that donor support to developing countries such as Ghana would reduce.

The situation, Dr Akoto Osei said, brought to the fore the need for the country to strengthen its domestic revenue mobilisation and management.

He said although domestic revenue had increased from GH¢3 billion in 2001 to GH¢16 billion in 2008, there was still room for improvement.

Launching the book, Dr K.Y. Amoako, a former Executive Secretary of the Economic Commission for Africa, commended the author for excellent work done and said the book was about progress, which had been made by the country and opportunities it had missed.

He said the book also dwelt on lessons from the past, the present situation and the components of the future.

Dr Amoako, who is also the founder of the African Centre for Economic Transformation, said lessons which could be drawn from the book were that leadership, structures and institutions, good policies, stability in economic management and continuity were of critical importance to national development.

He said since impressive progress had been achieved, there was the need to transform the economy from its over-dependence on a few commodities to diversification in which manufacturing and infrastructural development, among others, would feature prominently.

Dr Amoako said Ghana was 88th out or more than 100 countries in terms of infrastructural development and added that although the banking sector had become dynamic, accessing affordable credit was still a problem.

He called for a dynamic shift in the economy and advocated that the government should be the nerve centre of economic transformation.

Dr Amoako underlined the need for modernization of agriculture, improvement of infrastructure, diversification of exports, regional integration and fundamental reform in the financial sector, employment generation with special focus on small and medium scale enterprises, as well as leveraging technology.

Mr Moses Asaga said the book set out the problems and promise into the future.

He said the United States government had demonstrated that state intervention was needed in the distribution of wealth.

He said the recent financial crisis in the global economy had given an indication that the market was not always right and underscored the need to move the economy from aid dependency.

On the emerging oil industry, Mr Asaga called on the government to increase its stake in the industry beyond the payment of royalties.

The editor of the book, Mr Agyeman Dua, said Ghana was not a failed state, pointing out that there was great hope in its future development.

He said, however, that Ghana's progress in the next 50 years would depend on the lessons from the past and how the leaders would manage the country against the backdrop of world trends.