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01.03.2005 Business & Finance

Ghana can't achieve $1000 PCI with current growth rate

By GNA

Accra, March 1, GNA - Ghana can not achieve a Per Capita Income (PCI) of 1,000 dollars by 2013 with the current annual growth rate of 0.06 percent, Dr. Robert Osei, a Lecturer at GIMPA stated on Monday. Even if the country could make a one percent growth rate annually by the 2013, a 1,000-dollar PCI to attain middle-income status would still not be feasible, he added.

Speaking at a seminar on the 2005 Budget organised by the Institute of Statistical, Social and Economic Research (ISSER), Dr Osei said the economy had to grow at about 1.7 percent per annum to achieve the target. He noted that the current economic performance "Is way behind in terms of what we have set for ourselves as a nation".

Dr Osei said even though the 5.8 percent real Gross Domestic Product achievement for the 2004 was not "pro-poor", there was the need to redouble efforts towards structural transformation. Giving the performances of the various sectors of the economy, he said the agriculture sector remained the major contributor that drove growth with the cocoa sub-sector being the dominant contributing 29.9 percent in 2004 as against 16.4 percent in 2003.

The industry sector he said made no major surprise with the construction sector contributing the highest, seven percent. Dr. Augustine Gockel, Senior Lecturer at the Department of the Economics, University of Ghana said even if the economy should grow by 13 percent, without structural transformation, poverty would still be endemic in the country. He stressed the need for industry and the service sectors to contribute to make significant impact and called on Bank of Ghana and government to put in the measures to ensure effective monetary management to check inflation.

Dr. Anthony Tsekpo, Research Fellow at ISSER praised the budget's tax incentives but said the challenges ahead would be whether that relief could lead to job creation. He said there was the need to obtain a balance between stimulating short-term demand and fiscal consolidation.

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