2018年-世界发展银行全球_Third_Ghana_Economic_Update___Agriculture_as_an_Engine_of_Growth_and_Jobs_Creation_62页_5mb

3RD GHANA ECONOMIC UPDATE: AGRICULTURE AS ENGINE OF GROWTH AND JOBS CREATION

Core Content

This document provides a comprehensive overview of Ghana's recent economic developments and outlines the role of agriculture in driving growth and job creation. It highlights the impact of the extractive industries, particularly oil and gold, on the economy and the challenges faced by the agriculture sector. The report also suggests policy reforms to improve the sector's performance and sustainability.

Recent Economic Developments

• GDP Growth: In September 2017, Ghana's economy expanded by 9.3 percent year-on-year, up from 4.3 percent in September 2016. This growth was driven by the industry sector, particularly mining and petroleum, which recorded a 16.6 percent increase in production.
• Services Sector: The services sector rebounded from weak performance in Q1, growing at 5.6 percent, with significant contributions from information and communication technology, health and social work, education, and real estate.
• Fiscal Performance: The fiscal deficit for the first three quarters of 2017 was 4.6 percent of GDP, down from 9.3 percent in 2016, suggesting progress toward the full-year target of 6.3 percent of GDP. The primary balance improved to a surplus of 0.2 percent of GDP by September 2017.
• Debt to GDP Ratio: The ratio is expected to decline from 73.4 percent in December 2016 to 70.5 percent in December 2017 due to fiscal consolidation.
• External Position: The trade balance improved to a surplus of 3.2 percent of GDP in June 2017, from a deficit of 3.3 percent in June 2016. Merchandise imports fell by 13 percent, contributing to a narrower current account deficit.
• Inflation: Headline inflation decreased from over 19 percent in March 2016 to 11.6 percent in October 2017, with a downward trend in both food and non-food prices.

Economic Outlook and Challenges

• GDP Growth Projections: Annual GDP growth is expected to rebound to 6.1 percent in 2017, with the government projecting 7.9 percent. Non-oil growth is projected at 5.9 percent for 2017, up from 4.3 percent in 2016.
• Fiscal Outlook: The fiscal deficit is expected to decrease to 6.3 percent of GDP for 2017, driven by expenditure cuts. However, sustainability of these cuts is questionable due to pressures from election promises and weak revenue performance.
• Monetary Policy: The Bank of Ghana is expected to maintain its inflation targeting framework, with inflation projected to fall within the target range of 8 percent (±2 percent) by 2018.
• Dutch Disease Concerns: The growth of the extractive industries is constraining agriculture, with the agriculture sector experiencing a decline in its share of GDP and Terms of Trade.
• Long-Term Risks: The economy's reliance on natural resources poses risks, including potential Dutch Disease effects and long-term decline in non-resource exports. There is a need to invest in non-natural resource sectors to ensure sustainable growth.

Agriculture as Engine of Growth and Jobs Creation

• Sector Performance: Agriculture experienced its lowest growth (0.8 percent) in over two decades in 2011, the same year Ghana began commercial oil production. Since then, the sector has not fully recovered its former growth and vibrancy.
• Contribution to Economy: Agriculture remains a key contributor to export earnings and a major source of inputs for the manufacturing sector. Two-thirds of non-oil manufacturing depends on agriculture.
• Cocoa Sector: Cocoa accounts for 25 percent of Ghana's total foreign exchange earnings and 20 percent of global cocoa exports. The cocoa sector needs reforms to strengthen governance and improve productivity.
• Jobs and Livelihoods: Agriculture is the most important sector for jobs and livelihoods in rural areas, with a large multiplier effect on employment. However, the sector remains dominated by primary production, with limited agro-processing and value addition.
• Employment Dynamics: Over 70 percent of employment in agriculture still resides in rural areas, and limited progress has been made in moving labor into other sectors due to low productivity and lack of dynamism in non-agricultural private sector.

Constraints and Opportunities

• Constraints: The sector faces challenges such as limited fiscal space, low productivity, and the negative impact of extractive industries on non-resource sectors. Public spending on agriculture has declined significantly, with only 1.3 percent of the total budget allocated to the sector by 2014.
• Opportunities: There are opportunities for agricultural transformation through improved research and development, expansion of irrigation networks, and better integration of smallholder farmers into the value chain. Strengthening the legal and regulatory environment for agribusinesses is also crucial.
• Policy Options:
  • Improve the quality and effectiveness of public expenditure in agriculture.
  • Enhance the environment for agribusiness by reforming legal, regulatory, and administrative systems.
  • Finalize and implement the Cocoa Sector Development Strategy (CSDS II).
  • Strengthen the role of women and youth in the sector while adhering to international commitments on child labor.

Key Recommendations

• Fiscal Reforms: Focus on improving revenue mobilization through tax compliance and broadening the tax base. Streamline tax incentives to support growth.
• Expenditure Planning: Implement more forward-looking expenditure planning, including containment of the wage bill.
• Private Sector Diversification: Encourage private sector-led investments in non-oil sectors to reduce reliance on natural resources.
• Agricultural Transformation: Invest in research and development, irrigation, and value addition to improve productivity and create jobs.

Conclusion

Agriculture remains a vital sector for Ghana's economic growth and job creation, but it is under pressure from the dominance of extractive industries. The government needs to prioritize agricultural transformation through targeted policies and investments to ensure long-term sustainability and resilience.