Ghana’s economy is largely agrarian with a relatively small industrial sector and a growing service sector. However with oil production anticipated for late 2010, there are increasing concerns that the new commodity will dominate the economy to the detriment of other sectors.
The Minister of Finance and Economic Planning, Dr. Kwabena Duffour, in closing a week long review of Ghana’s Growth and Poverty Reduction Strategy (GPRS II) has allayed these fears stating that Ghana will not neglect the other sectors of the economy.
The review was part of the Multi-Donor Budget Support (MDBS) aid mechanism between development partners and government of Ghana officials.
The MDBS is a joint support mechanism of eleven development partners and the government of Ghana where DPs provide financial resources directly to the Government of Ghana budget to complement domestically generated revenues. The mechanism contributes about 30% of the aid that Ghana receives and has since 2002 when it began contributed over $2 billion to the country’s budget.
The statement by the minister comes in the wake of several reports of how projected revenues from the oil and gas could propel the economy if resources are used in the best interest of Ghanaians.
Experience from other oil producing African countries has showed a neglect of key sectors that kept their economies prior to oil discovery and production.
Ghana’s agricultural sector contributes about 60% of employment and contributes about 40 per cent to GDP. The contribution of agriculture to Ghana’s economic development are varied, ranging from food security, job creation to rural development. A bulk of Ghana’s population is rural based and involved in agriculture.
Already Ghana is inching towards middle income status which requires a per capita income of $700 or above. This status could easily be attained with oil revenues on board and the possible rebasing of GDP to 2000 figures. Currently the base year for computing Ghana’s GDP uses 1996 as base year.