DI supports Bawumia's praise for BoG in economic recovery efforts
The Danquah Institute (DI), a policy think tank, has echoed Vice President Dr. Mahamudu Bawumia's commendation of the Bank of Ghana (BoG) for its pivotal role in navigating the economy through challenging times and providing crucial financing to the government during a critical period.
Advertisement
In his recent national address, the Vice President urged Ghanaians to recognize and appreciate the efforts of the Bank of Ghana, which faced unwarranted criticism while undertaking necessary measures to steer the economy away from the brink of collapse. Dr. Bawumia emphasized the central bank's instrumental role in providing essential financing to the government during this crucial phase.
During the Institute's inaugural monthly media briefing, themed "Analysis of the Ghanaian Economy," held on Tuesday, February 13, 2024, Dr. Frank Bannor, Head of Research at DI, underscored the Institute's endorsement of Dr. Bawumia's observations. DI's research, Dr. Bannor explained, validates Dr. Bawumia's assertion that Ghana's GDP growth averaged 3.9% between 2013-2016, but surged to an average of 5.3% between 2017 and 2020.
Dr. Bannor elaborated on the substantial growth witnessed in the Ghanaian economy, citing a remarkable increase from 3.37% in 2016 to 8.13% in 2017. He noted that while the 2017 economic expansion was largely driven by the oil sector, similar to the trend in 2011, the non-oil sector also experienced positive growth, reaching 4.9% in 2017 compared to previous years.
Furthermore, Dr. Bannor highlighted the robust performance of agricultural GDP growth, which rose from an average of 2.9% between 2013 and 2016 to an average of 6% between 2017 and 2022.
However, Dr. Bannor lamented the adverse impact of the Covid-19 pandemic on the economy, causing growth to plummet to 0.51% in 2020, the lowest rate since 1983. He explained that the decline in productivity due to Covid-19 resulted in a reduction in trade and services, thereby affecting the GDP growth rate.
Dr. Bannor contextualized Ghana's experience within the global landscape, noting that major economies worldwide also witnessed declines in GDP growth rates. He cited examples such as Germany, the UK, the US, India, Indonesia, Israel, Italy, Japan, and Switzerland, all experiencing economic contractions in 2020.
Given these circumstances and Ghana's inability to access the international capital market, Dr. Bannor emphasized that Central Bank financing became the only viable option.
