05.03.2005 Business & Finance

ISODEC Puts Question Marks On GDP Growth

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The Integrated Social Development Centre (ISODEC) has praised the government for achieving a 5.8 percent GDP growth in 2004, but asked Ghanaians not to over rejoice since the growth was achieved through the good yield of the cocoa sub-sector.

In response to the 2005 budget statement, ISODEC explained that a careful analysis of the GDP figure reveals that the cocoa-sub-sector contributed significantly towards the GDP and cautioned, 'in view of the fact that this is a highly volatile sector, it is important that we do not over rejoice, but rather put in measures to mitigate the effects in an event of failure in this sub-sector."

ISODEC recognizes the important role GDP plays in economic planning and suggests that the government should release quarterly growth data to facilitate policy formulation and analysis.

The issue of distribution and equity is also close to ISODEC's heart. It says much as the government and for that matter all Ghanaians are glad about an impressive GDP growth, the country cannot combat poverty unless wealth is equally distributed.

Similarly, ISODEC is worried about disbursement of the HIPC funds. Though it is glad that the country will receive $230 million for the next 20 years into the HIPC fund, it is jittery that the disbursement of the fund does not always get parliamentary approval. Rather, it is at the discretion of the Senior Minister. "This is worrying under democratic governance because it does not promote fiscal transparency", ISODEC cautions.

ISODEC says it appreciates the government's intervention in the cocoa sub-sector to ensure increased output and asked the government to extend the same support to the crop and livestock and fisheries sub-sectors. 'We also call on the government to implement the tariff policy on rice and poultry as early as possible."

ISODEC also welcomes the proposed establishment of a tomato processing factory at Techiman in the Brong Ahafo Region to add value to locally produced tomato, instead of the country wasting huge amounts of foreign exchange importing tin tomato. ISODEC underscores the fact that value addition is essential for increased economic growth due to the country's dependence on primary production.

'Agriculture's contribution to overall GDP will be greatly increased if more measures are put in place to commercialize and mechanize our agriculture. Irrigation farming should continue to be supported by government, especially to the poor farmers to form a sure way of increasing production and incomes."

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