Accra, 3 July 2014 – The Director of External Resource Mobilisation Division of the Ministry of Finance in Ghana, Mr. Michael Ayesu has descried UNCTAD’s Economic Development in Africa 2014 report as useful and timely, especially so when it is released at a time when the country is reviewing its Ghana Shared Growth Development Agenda (GSHDA). He commended UNCTAD for the report which he believes will inform some of the decisions in the GSHDA II. According to Mr. Ayesu, the crux of the report, which is a need for economic policy reorientation by African countries for transformative growth mirrors what is currently being discussed by the government of Ghana in its effort to find a medium-term solution to economic challenges facing the country.
Mr. Ayesu was speaking at the launch of the EDA 2014 report in Accra. He noted however, that Ghana, like many other African countries need to do more in areas like energy and road infrastructure in order to “increase the productivity of the little resources that we have”. “We have to do it in an efficient manner so that we can extend the quality of the investments we make” he added.
The report, subtitled “Catalysing Investment for Transformative Growth in Africa”was presented by Mr. Sylvester Bagooro of Third World Network (TWN), Africa. The report shows that from 1990 to 1999 the incremental capital–output ratio – which measures the degree of inefficiency in the use of capital – was about 7.4 in Africa, while from 2000 to 2011 it fell to 4.1 This means that producing an additional unit of output in Africa required $4.1 in 2000–2011 compared to $7.4 of capital in 1990–1999 – a reduction of almost half.
Factors that have contributed to productivity increases in Africa over the past decade, according to the report, include improvements in infrastructure, relatively better access to technology and policy reforms that reduced the transaction costs linked to production, trade and investment.
Despite this achievement, the nature and pattern of this growth, the report notes, has not resulted in more jobs and poverty reduction because consumption has been the dominant driver. The report argues that a consumption-based growth strategy must go hand-in-hand with an increase in investment in strategic and priority sectors of the economy – such as infrastructure, agriculture and manufacturing.
The report warns that Africa cannot achieve sustained economic growth and transformation without diversifying the sources of its economic growth both on the demand and supply sides of its economies.
Contributing to discussions during the launch, Mr. Gyekye Tanoh of TWN Africa reminded the participants that the report is a serious critique of the dominant economic policies of African countries and calls for a shift in economic policy orientation in order to enable African countries make the necessary economic gains for transformative growth.