My pick of key pillars in 40-yr devt plan (II)
Agriculture, industry and rail transport, which are the pillars of the economy, seem not to be doing well. This calls for the needed push to turn the economy around.
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A concentration on analysis here has been on current data available from 2006 to 2013.
Growth trends in agricultural
The agricultural sector has not fared well in contributing to the overall output of the economy. The sub-sector saw a 7.4 per cent growth in 2008, 7.2 per cent in 2009 and 5.3 per cent, 0.8 per cent, 2.3 per cent and 5.2 per cent in 2010, 2011, 2012 and 2013 respectively.
As the Institute for Statistical, Social and Economic Research (ISSER) said last year, “the contribution of the agricultural sector to the economy of Ghana since 2010 has consistently dropped vis-à-vis contribution from the service and industry sectors.” Consider the table A.
It is clear from the table that the agric sector has not performed creditably as compared to services. This is also depicted in the foreign exchange earnings that the sector contributes to the economy.
This indicates that the structural transformation of the economy is now shifting from the agric sector to the services sector.
Growth trends in the industrial sub-sector
Industry’s share of the GDP between 2009-2013 indicates that the sector contributed 19 per cent to the general output of the economy in 2009.
In in 2010, 2011, 2012 and 2013, the sector contributed 19.1 per cent, 25.6 per cent, 28.6 per cent and 28.6 per cent respectively as a real GDP target of eight per cent growth rate for 2013 was missed with a recoded figure of 7.1 per cent.
With sub-components in industry, manufacturing and construction, they also missed their target as actuals were far below expectations. Refer to Table B.
From the table, it is evident that the railway sub-sector in Ghana is woefully not patronised and very much underdeveloped. Goods and freight from the ports of Ghana and other places are still transported primarily by road throughout Ghana and from Ghana to other parts of the sub-region, and to land-locked countries such as Mali and Burkina Faso.
Why emphasize in agriculture, manufacturing and rail transport
From the analysis and data observed, it is indicative that the economy has not been doing well in these sectors.
It is one of the fundamental reasons why we are not fully enjoying the fruits of what the economy can bring. The need to curve a model I call; “The 3 sector model of Economic Growth and Development”, enshrined in our proposed 40-year development-plan, will see the economy leap in bounds for the time-frame given.
That is, an aggressive focus on the agric, agro-based industries and the rail sectors will see all the other sectors spinning around them to actually balance the economy. Eventually, such will bring in the needed foreign exchange and correct the imbalances of the forex sector, which has the tendency to stabilise the cedi and thereafter, result in the needed growth and development that the country yearns for.
Focus on agriculture
The need to concentrate on agriculture stems from the fact that the sector can employ the teaming youth who are without jobs. Models such as the youth in agric programme and the National Service Scheme geared towards this sector can have greater impact if the sector is really mechanised and commercialised on a larger scale.
Irrigation facilities, tractors, faming equipment and silos for storage can be made available on a larger scale with adequate funding for start-ups to attract a lot more of the unemployed.
The sector’s commercialisation, as opposed to the piecemeal annual subsistence type, will address issues of food shortage, provide adequate platform to diversify our exports, increase tax revenues from international trade and shore up foreign exchange reserves. The end result will be an improvement in the international trade balances which has always not been favourable.
A true attention to the sector should see its contribution to GDP improve and once more become the backbone of the economy.
With the influx of shopping malls, a vibrant agric sector will also serve as a ready market for their stalls and also feed the growing hospitality industry to perfection.
Rail transport
This sub-sector has the capacity to transport all haulages with ease and at low cost. This will cut operational costs and give space for a larger scale of production. There will be the enjoyment of economies of scale and open up more avenues for employment.
The rail sector does not face any traffic congestion and therefore will be more convenient to use for the working class. It has the tendency to reduce the wastage in the system by less fuel usage. Travel time to work will be reduced, offering employees the opportunity to be effective and efficient with their man per hour outputs. This will aggregately increase the GDP.
Accidents on our roads will be minimised and a lot of precious lives will be saved.
Audaciously, because our railways were built to serve a ‘‘Guggisberg economy’’, we can do more to re-engineer the rail lines to serve the domestic economy and the sub-region as a whole.
The National Development Planning Commission’s task to solicit views for a long-term development is laudable. My view on the implementation of this “3 Sector Model of Economic Growth and Development” should be considered seriously.
The rest of the sectors making up the economy will all develop around these suggested pillars of the economy as they will form the linkage to the rest and therefore balance the structure which is fundamentally weak and import driven.
According to Unegbu & Irefin (2011), economic growth as indexed by GDP, only refers to a rise in the quantitative output of a country’s supply of goods and services and therefore does not include development as outlined in improvements in the various aspects of life, such as life expectancy, poverty rates, literacy rates and other related human developments in health, security, standard of living, education, road network and environmental quality.
Some past long-term plans have left some visible developments till date. For instance, the 19 hospitals, including the Korle Bu were built under the Guggisberg’s 10-year development plan of 1920-1930, as well as the Achimota College. Under Dr Nkrumah’s seven- year development plan of 1963/64-1969/70, we can see the Akosombo Dam, the Motorway and plethora of secondary schools across the country and their benefits up to this day.
It is, therefore, my wish that the NDPC in couching the 40-year development plan for the country will not only focus on the GDP side, but also on the fundamental changes in the structure of the economy.
