ECONOMY OF GHANA

PRESENTATION BY GROUP 16 ON THE TOPIC; “the performance of the Ghanaian economy before and after the implementation of the World Bank/IMF sponsored Structural Adjustment and Economic Recovery Programme in April 1983.”

NAME INDEX NO.

Danso Olivia Kumi 12BAR107 Essandoh Gifty 12BAR115 Ameyaw Stephen 12BAR133 Awuku Angel Theodora 12BAR119 Adom- Adade Gifty 12BAR109 Bedi Godson Yaw 12BAR117 Nartey Felix Tetteh 12BAR135 Offei Awuku Eugene 12BAR122Benjamin Acheampong 12BAR116

LECTURER: DR. RAYMOND DZIWORNU

ECONOMY OF GHANAGROUP 16

OBJECTIVES OF PRESENTATION

What is SAP and ERP? Why SAP and ERP? Performance before SAP/ERP. Performance after SAP/ERP. Has SAP and ERP achieve its

goals?

During the 1950-60, GDP grew annually by 4.1 % and agricultural output by 4.3 %. High growth in the output of the major export crop, cocoa, provided the basis for rising investment via increased foreign exchange availability. With export earnings rising at 3.2 % per annum during the nineteen-fifties, both imports and gross domestic investment grew at 8.9 % per annum during the decade. Industrial output also rose at 6.7% per annum.

THE ECONOMY(BRIEF ACCOUNT)

Economic Recovery Programme (ERP)-1983/86 Structural Adjustment Programme (SAP)-

1986/90To reverse the deterioration in the economy since 1970, and resume, sustain and accelerate growth, Ghana launched the ERP and SAP.

Were supported by the World Bank Group and various facilities of the IMF including the enhanced structural adjustment facility (ESAF) and other concessional assistance.

What is ERP and SAP?

The ERP and SAP was implemented because of the following:1. Persistent high inflation.2. Decline in production and export.3. A decline in per capita income increased poverty.4. A worsening of income distribution.5. Growing unemployment.6. Flourishing illegal activities.7. Emigration of skilled professionals.8. Political instability.

Why the ERP and SAP?

Performance of the Economy before and after ERP and SAP

BODY

Variable Annual average 1978-83( Before)

Annual average 1984-90(During)

Annual average 1991-94 (After)

Real GDP Growth -1.34% 5.4% 4.5%Balance of Payments (US$)      Trade Account 47.5 -97.4 -449.2Current Account -99.8 -101.0 -36.1Overall Balance -102.0 98.3 59.7 Fiscal Deficit as % of GDP -5.95 0.21 -1.3Broad Money Growth 36.6% 50.0% 46.4%Gross Fixed Capital Formation as % of GDP

5.2 10.8 14.8

Inflation(CPI) 73.7% 29.8% 19.9%

Variable Annual Average 1984-91(PLAN)

Annual Average 1984-91

(ACTUAL)

DEVIATION

Real GDP Growth 5.11% 4.6% -0.45%Balance of Payments (US$)      Trade Account -135.7 -334.7 -199.0Current Account -342.6 -268.0 74.6Overall Balance 111.7 130.0 18.3 Fiscal Deficit as % of GDP -7.3 -5.2 2.1Broad Money Growth 20.2 55.9 -35.9Gross Fixed Capital Formation as % of GDP

18 14.4 -3.6

Inflation(CPI) 22.30 28.30 -6.00%

BODYPLAN VERSUS ACTUAL OUTCOME

Using this analysis, the ERP/SAP appears less successful. The real GDP growth rate fell slightly below target, whilst inflation, domestic savings, gross fixed capital formation, broad money growth and the balance of payments, trade account, all missed their targets by a significant margin. Only government budget deficit and the balance of payments current account and overall balance did actual outcomes surpass the target.

CONCLUSION