pursue policies to absorb economy from shocks

Story: Boahene Asamoah

THE World Bank’s Country Director, Mr Ishac Diwan, has said that the country must pursue efforts that will saveguard the economy from external shock, by taking advantage of price increases in agricultural products and gold on the international market.
He said although the economy had been resilient in spite of the multitude of shocks, macro balances had been pushed to the limit.
Speaking at the Annual Ghana Consultative Group/Partnerships Meeting in Accra yesterday, Mr Diwan stated that high food prices had a great potential for agriculture, adding that it was important therefore that ambitious programmes were put in place to take advatage of the situation.
The one-day meeting on the topic “Ghana’s Aid Policy-A Joint Approach to Accelerate Development” was attended by the country’s developmental partners.
The aid policy is set against the background of the country’s vision of becoming a middle income country by 2015.
The World Bank Country Director said the global context of development offered both challenges and opportunities adding that “leadership, policy and serious implementation will make all the difference.”
Mr Diwan said according to the bank’s research there were mounting evidence that the country was a star performer with a rating of four out of six.
“The past six years have put Ghana in an enviable position”, he stated and outlined some of the achievements as the stable macro, good growth rate and shared growth.
Mr Diwan stated that the economy was more resilient and had a better stabilisation as witnessed by the recent safety net packages.
He said there had been progress on some of the Millennium Development Goals (MDG) such as poverty reductions, which he said had declined from 40 per cent to 28.5 per cent in 2005, good improvements in health and education among many others.
He congratulated the government for its forward looking long-term development plan, describing the document as rightly outlining several areas where systematic progress was required.
Mr Diwan mentioned some of the challenges as the infrastructure agenda, with difficulties in the energy sector, effective decentralisation and the use of technology in all efforts.
He said with the discovery of oil the country could more confidently envisage the path to middle income, adding that “the government must commended for the preparatory work to make oil a blessing rather than curse.
Mr Diwan called for the need to factor in the private sector more into the infrastructure gap especially in the area of energy, information technology and water.
The country director underscored the importance of Overseas Development Assistance (ODAs) and said there was the need to work together on harmonisation and aid effectiveness.
He said there was the need for ODAs as the country progressed because it had the potential to support inclusive societies by investing in the poor, reducing financing costs and could reduce risks linked to the international market.
“But the role of ODA will need to continue to evolve. It must foster and not crowd out local capacities”, he stated.
Over the last two decades, external assistance has constituted an important source of financing Ghana’s development and would continue to play a vital role over the medium to long-term.
Currently,\ aid accounts for about 20 per cent of the total annual government budget resources.