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22
Wed, Nov

Yes, we can avoid the Dutch disease

Before the discovery of oil in commercial quantities in 2007, the economy was anchored on agriculture and manufacturing for its net export.

It was believed that the oil find would boost growth and spur the country to economic prosperity. But experts have advised the managers of the economy to adopt a model of development that will prevent the Dutch disease from affecting the country.

The Dutch disease, also known as the “resource curse”, is a term coined in 1977 to explain the sharp decline in the Dutch economy following the discovery of natural gas reserves in The Netherlands in 1959.

Due to a new dependence on the natural gas resource, The Netherlands experienced devastating economic growth, with domestic industries and markets being ignored in favour of the export of natural gas, as well as an over-valuation of the Dutch currency.

It was believed that Ghana would avoid this disease that had prevented countries such as Nigeria, Venezuela and Angola from enjoying the full benefits of their oil find.

Sadly, it seems the country has not escaped the Dutch disease. With farmlands in communities near the oil fields taken over, food production has reduced.

The reduction in food production means a drop in the growth of the agricultural sector. Growth in the sector has been consistently dropping since oil was found.

In 2016, the sector recorded a low performance of 0.04 per cent, from 6.2 per cent in 2009.

The government blamed the consistent drop in the sector on negative growth in the crops sub-sector, in spite of the fact that other sub-sectors such as livestock and fishing recorded some growth.

The truth was that most of the government’s expenditure on agriculture went to finance a fertiliser subsidy and agricultural mechanisation service centres to boost production.

But it is heartwarming to hear the President give the strongest assurance that he will lead the country to economic prosperity by investing in agriculture and avoiding the Dutch disease.

Indeed, the government has embarked on an ambitious programme to revive the agricultural sector. The Planting for Food and Jobs programme is a strong indication of the government’s commitment to the sector.

The programme is expected to modernise agriculture, improve production, achieve food security and make the country more self-sufficient, while creating jobs for the youth.

Indeed, the Daily Graphic commends the government for this bold initiative to revive the agricultural sector and create jobs for the teeming unemployed youth.

The paper, however, urges the government to spell out other policy measures beyond the stated promise of avoiding the Dutch disease.

For us, paying more attention to the agricultural sector does not also mean neglecting other sectors of the economy. It is only when a comprehensive policy is adopted towards all the sectors, with agriculture as the springboard, that we can safely say that we are on the road towards avoiding the Dutch disease.

Other countries have done it successfully and we can do it even better if we commit ourselves to the cause.