Recent Economic Developments
The article presented by the World Bank Group aims to assist Ghana in maintaining economic growth. The organization would help the country surpass its objective of reducing poverty levels by 50% and sustain middle-income status. The Covid-19 Pandemic has had a detrimental impact on Ghana's economy, resulting in the first recession in 38 years. This shrank the economy by 3.2 and 1 percent in the second and third quarters of 2020 (World Bank, 2019). High population growth and low economic growth resulted in a 1 percent drop in real per capita incomes. The pandemic saw the fiscal deficit reach 16.2 percent of the GDP, and public debt rose to 76.1 percent of the GDP ( World Bank, 2019 ). The nation's current account deficit surged by 0.1 percent to 3 percent of the GDP. However, Ghana has experienced lower net investment income outflows and stronger remittance in-flows, which have helped mask the pandemic's impact.
Main Conclusions
Several inferences can be drawn from the article. First, the medium-term adverse effects of the Covid-19 Pandemic on economic development will continue to be experienced in Ghana through lower foreign direct investment, low external demand, and tourism receipts. However, there are baseline assumptions that suggest that Ghana will enhance its economy by lowering commodity prices. Lowering oil prices will result in an average growth of 2.2 percent between 2021 and 2023 (World Bank, 2019). The article also suggests that implementing the COVID-19 Alleviation and Revitalization of Enterprises Support (CARES) program will help Ghana grow its economy at an average of 4.5 percent between 2021 and 2023 (World Bank, 2019). Additionally, the central bank's gradual return to a stricter monetary stance and the relative stabilization of the exchange rate will help moderate inflation, improving the current and fiscal account balances. Nonetheless, World Bank (2021) believes that the poverty rate will mount to 30.9 percent in 2021 before steadily decreasing as private consumption grows.
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Alternative Conclusions
It is possible to reach alternative conclusions based on knowledge gained from the article. Covid-19 variants pose a significant threat to economic growth in Ghana. The emergence of new variants will trigger tighter restrictions on economic activities and limit the movement of people. Such measures will only serve to increase stress on Ghana's economy. Additionally, the pandemic will also increase inequality within the country. According to Schotte et al. (2021), the pandemic has had a persistent national effect on labor market outcomes. It has jeopardized the livelihood of small enterprise owners working in the informal economy. Until the Ghanaian government is able to manage the Covid-19 Pandemic, the nation will not be able to effectively grow the economy and work towards its goal of poverty alleviation.
References
Schotte, S., Danquah, M., Osei, R. D., & Sen, K. (2021). The labour market impact of COVID-19 lockdowns: Evidence from Ghana (No. wp-2021-27). World Institute for Development Economic Research (UNU-WIDER) .
World Bank. (2019). The World Bank in Ghana. Worldbank.org, https://www.worldbank.org/en/country/ghana/overview#1
