The World Bank Group has cautioned the government against overly depending on the country’s natural resources for economic development.
The bank noted that Ghana’s natural resources contributed about 13 per cent to Gross Domestic Product (GDP), which was too high, compared to other lower-middle-income countries in sub-Saharan Africa, whose natural resource contribution was around 3.7 per cent.
In a presentation at the Kick-Off Meeting for Ghana Partnership Framework, the Senior Economist at the World Bank, Ms Tomomi Tanaka, said the issue had led to high fiscal volatilities in the economy and the risk of catching the dreaded ‘Dutch disease’.
She, therefore, called for quick measures to diversify the economy.
“In 2015, natural resource rents reached 20 per cent of GDP, the highest share in West Africa, and three products — gold, cocoa and petroleum — account for over 80 per cent of exports,” she said.
Ms Tanaka also noted that the country’s significant oil revenue inflows posed a risk to exchange rate management and the competitiveness of other sectors of the economy.
“A large inflow of oil revenues could lead to exchange rate appreciation, which could in turn have detrimental effects on the competitiveness of non-oil sectors.
“At the start of oil production in 2011, agriculture saw its lowest growth rate of 0.8 per cent and industry grew by over 41 per cent,” she pointed out.
The chief economist said although there was also an impact of low crop yields in 2011, amplifying the shift, 2011 marked the time of increased natural resource revenues.