Professor Mthuli Ncube
Professor Mthuli Ncube, Managing Director and Head of Quantum Global Research Lab, the research arm of Quantum Global, has projected a better economic outlook for Ghana in the next few years.
Professor Ncube said factors such as micro economic management, structural reform and public service investment by the ruling New Patriotic Party (NPP) government are very positive indicators for growth going forward.
“Micro economic management is really fiscal discipline that is beginning to take shape under the new government,” he said.
Professor Ncube further explained that domestic debts will come down because of the lower interest rate of the short term low inflation environment and the substitution of that with the less expensive long term debts.
“We have no doubt this current government is doing the right things that will move Ghana up the rankings, improve investment climbing going forward.”
18TH Position
Professor Ncube made this observation during a meeting with a select group of journalists and other stakeholders in Accra.
He shared the latest Africa Investment Index (AII) by Quantum Global with them.
The research placed Ghana in the 18th position of the most attractive economy for investments to the African continent.
In 2016, Ghana attracted a net foreign direct investment of $3.5 billion, and according to research by Quantum Global Research, Ghana’s economy has experienced strong and robust growth over the past decade, making it worthy of emulation by its regional peers.
“Industry was the main driver of overall growth with an annual average growth of about 13 percent, followed by services sector with 8.4 percent and agriculture with about 8 percent.
“The strong growth record has fostered the country’s graduation to lower-middle-income status in 2010,” according to the release by Quantum Global Research Lab.
However, the research showed that while the economy continued to grow at a steady pace until 2013, the GDP growth slowed from 7 percent in 2013 to 3.6 percent in 2016 due to structural challenges such as the ongoing fiscal deficits which pushed public debt to over 70 percent of GDP.
“Furthermore, a three-year power crisis and power-rationing slowed down private sector’s productivity and competitiveness. In addition, the significant external sector deficit and low world prices for the country’s gold, cocoa, and oil export were a major factor behind the economic slowdown,” the report adds.
Professor Ncube said the risk factors in the previous government- exchange rate, import cover and external debt risk which went up basically pushed Ghana downwards.
“These factors are already changing, now inflation risk and exchange rate risk is down, import cover risk is also down so things are improving.”
Single Digit Inflation
He said the country is likely to have single digit inflation looking at the prognosis and risk factor which will further reduce with investment.
“One of the drivers of inflation is the public sector expenditure which is coming under control, secondly imported inflation which has lessened because of the stable cedi, the exchange rate condition which will stabilize inflation and put it down,” he added.
Future Projections
Professor Ncube said sustaining growth at about of 5 to 6 percent upwards will move the country into a more favourable position in the investment index.
“Infrastructure investment is going to be key and the government has made it very clear that it wants to invest in infrastructure in very innovative ways that would not push up the government debts and so forth and that would aid growth.
By Jamila Akweley Okertchiri