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New research highlights cost-effective strategies to strengthen Ghana’s economy

BY: Graphic.com.gh

New research on measures to spur growth across all sectors of the Ghanaian economy was presented by economists in Accra on Saturday, August 8, 2020.

The findings were submitted as part of the "Ghana Priorities" project, an initiative being spearheaded by the National Development Planning Commission (NDPC), in collaboration with the Copenhagen Consensus Centre, an award-winning international think tank.

The project seeks to prioritise the best policies for the country's future based on cost-benefit analysis.

Prof. Robert Darko Osei from the University of Ghana explained that agriculture is a significant contributor to the Ghanaian economy and an important source of employment, with over 40% of all workers engaged in farming. With growth and development, the country is gradually shifting away from this sector towards industry and services, but agriculture is still key for the economy, and a necessary vehicle for reducing poverty and food insecurity.

Increasing agricultural output can be achieved through three main mechanisms, he said: increasing area under cultivation, improving the yield, and reducing post-harvest losses.

Prof. Osei’s team therefore analysed the cost and benefits of improved seeds and fertilizer, irrigation and mechanization to increase yields, and warehouses to reduce post-harvest losses. They found the most cost-effective solution to be a fertiliser subsidy that would yield benefits over 4 times greater than its cost.

Prof. Wisdom Akpalu, Dean of the School of Research and Graduate Studies at the Ghana Institute of Management and Public Administration (GIMPA), highlighted that fishing also makes a substantial contribution to Ghana’s economy and employment, sustaining the livelihoods of at least 3 million people. However, the marine fish stock in Ghana is biologically over-exploited and at risk of collapsing, which requires urgent solutions to avoid ecological collapse and guarantee a sustainable income to the artisanal fishers and the entire value chain.

To address the overfishing problem, Prof. Akpalu discussed three policy interventions: replacing illegal fishing nets, limiting the number of boats while providing training and subsidies for fish farming, and installing video devices in trawl vessels to monitor harmful illegal activities. All these policies would produce positive returns on investment.

With regard to industries, Prof. Peter Quartey, Director of the Institute of Statistical Social and Economic Research at the University of Ghana pointed to several studies showing that government support for management consulting services can significantly improve factory operations and processes in areas such as quality control, human resources, inventory, and sales. Every cedi spent on improving management practices would bring a return 6 times higher than the original investment for large enterprises, and almost 10 times higher for medium-sized companies.

He also highlighted that access to credit is another crucial factor for private businesses and economies. Financing for companies could be promoted in Ghana by ensuring better surveillance of the credit referencing system, better address systems, improving the quality of information available to lenders and enforcing a rewards and sanctions regime. These measures would create nearly 12 cedis worth of benefits to society for every cedi spent.

Providing capital grants to selected microenterprises was estimated to generate a benefit 7 times higher than the investment.

Multiple teams of researchers also presented new studies on education at different stages of life such as primary school, senior high school and job training. Among these measures that seek to strengthen the working population of the future, quality primary education has the highest impact.

Dr. Festus Ebo Turkson and Dr. Priscilla Twumasi Baffour from the University of Ghana introduced the pedagogical approach of ‘Teaching at the Right Level’, which targets instruction to the specific learning needs of children by splitting them into class groups based on learning levels rather than age, for one or two hours per day. The better learning outcomes resulting from this would be worth 1.5% of earnings over students’ lives, with every cedi spent generating social benefits worth Ghs 8.

The Ghana Priorities conference will resume at 9:00am on Sunday, 9th August at the Kempinski Hotel, Accra, with research presentations on subjects including poverty, nutrition, land records, transport and sanitation.

After hearing presentations from 28 teams of economists from Ghana and abroad over the course of three days, an eminent panel including Nobel Prize recipient Finn Kydland and six distinguished national economists will rank all interventions and establish priorities for a prosperous future. Their findings will be presented on Monday.