Economy should trible to achieve middle income status

Story: Boahene Asamoah

GHANA’s rate of growth should increase by threefold in order to hit a per capital of $815 and $1020 by 2010 and 2012, analysts have predicted.
Ghana’s rate of growth has increased from 3.7 per cent in 2000 to 6.4 per cent by the end of last year.
The government has projected a per capital income of $1,000 by 2015, but analyst from Renaissance Capital thinks, Gross Domestic Product (GDP) growth has to triple to attain this feat.
The economy has been robust according to analyst and these robust growth if triple would deliver the increased in per capital income.
‘Furthermore, we think the $1,000 threshold in income per capita will represent an important pschological boost at a time when oil production starts accelerating structural change’, the analyst said.
However, a rise in GDP capital may not be fully indicative of actual income dynamics as a result of endowment differentials, notably in countries with small populations or oil exporters, leading in some cases to inflated GPD per capital levels.
According to Rennaissance Capital, in termsn of inequality, Ghana’s Gini Coefficient stands at 40.8 on a scale of 100, that is Ghana is ranged 135 among 177 countries.
This is far below most Sub-Saharan African countries having a relative level of development, but well above the level recorded in the developed world.
Research has revealed that recent economic reforms have sustained the consolidation of a domestic middle class which would become more evident when the results of new surveys are released in the future.
According to the United Nations Development Programme(UNDP), Human Development report for 2007-2008 shows cross-country comparisons were undermined by difference in survey methodology as well as the lack of updates since 2000’s.
The report reveals that Ghana has one of the lowest shares of income held by the 10 and 20 per cents richest segments of the population in the group of the SSA frontier markets.
The growth rate for Ghana is expected to hit seven per cent by the end of the year, but analyst expect that target to be review downwards.
The rise food and oil prices have taken a serious hit at the economy threatening the macro-economic stability.
However, government officials maintain the economy has been robust in the face of the global world crises.
Inflation has soared but has recently shown signs of marginal decline.
There is a large number of informal sector operators which constiute a huge number of people and as a result any increase in per capita income would only affect the small middle class and may not be indicative of a real growth in GDP.