The outlook in 2012 and 2013 remains positive with projected GDP growth of 8.3 % (7.6% non-oil) and 7.7 % (6.3 % non-oil) in 2012 and 2013 respectively.
A key risk to the fiscal outlook for 2012 is the possibility of higher public spending pressure due to the elections and wage pressures from the implementation of the new pay policy.
The population in the 15-24 age group has an unemployment rate of 25.6 %, twice that of the 25-44 age group and three times that of the 45-64 age group.
In 2011, Ghana made progress in consolidating the gains made in the management of its macro-economy in 2010 as year on year inflation dropped to 8.7 % and the fiscal deficit fell to 4.3 % of gross domestic product (GDP). The GDP growth for 2011 is projected to increase sharply from 7.7 % in 2010 to 13.7 % (7.5 % non-oil) aided by oil revenues and strong export performance of cocoa and gold.
Future growth prospects remain strongly positive with projections of 8.3 % and 7.7 % for 2012 and 2013 respectively. Oil production and mining activities led industrial sector growth at 36.2 %. This was followed by the services sector (5.8 %) and the agricultural sector (5.2 %).
Ghana’s middle-income status and oil receipts have provided the country with the fiscal space to seek non-concessional sources of finance. In August 2011, the Ghanaian Parliament approved a 3 billion dollars (USD) loan from the China Development Bank (CDB). This facility is the largest ever secured by Ghana and will be used to finance the infrastructure gap identified in the national development strategy, the Ghana Shared Growth and Development Agenda (GSGDA).
As Ghana starts accessing non-concessional financing to meet its development needs, the government will need to ensure the preservation of the country’s debt sustainability and the development of a strong institutional framework for public investment decisions.
Ghana continues to enjoy a more open society, with a vibrant media and strong public dialogue, which point to the consolidation of democratic rule. This has enabled Ghana to outperform most countries in West Africa and in the continent on measures of civil liberty, political rights and political stability. The parliamentary and presidential elections slated for December 2012 could further consolidate democracy.
A key risk to the macro-economic and fiscal consolidation plan in the election year would be to maintain public spending within prudent levels to ensure that spending pressures ahead of the elections are kept within sustainable limits.
Although Ghana has made strides in meeting the Millennium Development Goal (MDG) targets on under-five mortality and maternal mortality, the country is unlikely to meet these targets unless effective interventions are put into place.
The maternal mortality rate, which stands at 451 per 100 000 live births, has not shown any significant reduction. Despite interventions such as the new Child Health Policy (2009) and a scaling-up and sustaining of child survival interventions, the under-five mortality rate has fallen slowly from 111 to 80 deaths per 1 000 live births.
At this rate, the target of 50 deaths per live birth is unlikely to be achieved unless effective initiatives are implemented. To address the lack of progress, government has outlined an MDG Acceleration Framework (MAF) for maternal health and completion of an Emergency Obstetric and Neonatal Care Needs Assessment, which will guide future actions on MDG 5.