Ghana (ranked 10th) has become one of the most prosperous nations in Africa, built on a strong tradition of democratic stability, widely respected governance institutions, and a well-educated population, free from large-scale violence.
With increased investment and tourism, Ghana’s economy has consistently outgrown sub-Saharan Africa.
The challenge for Ghana now is to sustain this economic success and convert it into better living standards, analysts have observed.
Many Ghanaians have seen rising inequality while their living standards and employment opportunities have not improved.
Most measures of Ghana’s economic performance have slipped over the last 10 years: Ghana ranks 14th for economic openness; 33rd for economic quality, 13th in investment environment and 16th in market access and infrastructure.
There is work to do, analysts further Noted, to improve Ghana’s engines of prosperity: its economic openness, dynamism, and competitiveness.
For example, trading goods within and outside of the country is constrained by under-developed infrastructure, high tariffs, and long delays and high costs at the border.
Further investment in fixed broadband, transport infrastructure, and reducing friction at borders is needed to facilitate and boost trade.
Reliability of the electricity supply and an upgrade of the transport network remain key challenges: roads are over-utilised and rail is under-utilised.
Ghana’s rank for market access and infrastructure has, however, slipped four places to 16th and for investment environment down three places to 14th.
Investor protections are also weakening, down 13 places to 28th and improvements are being held back by ongoing challenges to international investment and access to finance for businesses.
These were contained in this year’s Africa Prosperity Report released on Monday.
Mauritius is ranked Number One with Seychelles, Botswana, Cape Verde and South Africa, in that order, making the Top 5.
Namibia, São Tomé and Príncipe, Tunisia and Morocco rank higher than Ghana.
Corruption & clientelism
Author Dr Stephen Brien of UK-based Legatum Institute, which produces the index annually, indicates that Ghana has made giant strides towards economic openness and greater prosperity to stand amongst the leaders in Africa.
“The challenge for Ghana now is the sustainability of this economic growth. Can Ghana increase the pace of its economic transformation fast enough to build a solid platform for continued growth and employment opportunities across the country?” Dr Brien asked.
He added: “To perpetuate its growth trajectory, reform of its governance is needed to increase labour force engagement and build market infrastructure, on which an open and dynamic economy depends.”
The age-old canker of corruption has been fingered as a bane on the country’s prosperity.
“Corruption and clientelism remain a brake on improvement and efficiency. Reducing corruption and improving government effectiveness through a results-based culture is the key to the delivery of services, fiscal sustainability, and the new infrastructure that Ghana needs to thrive.”