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Africa Rising: Jeffrey Sachs says Ghana's future looks bright

Because of good governance in the past, and now oil production, Ghana is likely to reach all of the Millennium Development Goals toward ending extreme poverty and child mortality.

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Ghana is also slowly becoming a services based economy rather than an agricultural based one. According to the Ghana Statistical Services, the services sector contributed 51.4 percent to the annual GDP, more than agriculture that had previously been the most dominant sector in Ghana, the world’s second biggest cocoa producer.

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Ghanaians complain about lack of benefits  

But many Ghanaians say they do not see the development projected by these figures and complain the government has not done enough to create jobs or improve infrastructure and the livelihoods of Ghanaians.

Thomas Onppug, a 45-year-old taxi driver, and father of two who lives in the suburbs of Accra syas that he could only just cover his rent with the money he earns from driving a taxi, owned by another man.

“The government [officials] are bad and not performing well,” says Mr. Onppug, also a supporter of the opposition National Patriotic Party (NPP). “The increase in petrol cost is bad and I am not getting anything,” he adds, referring to the government’s recent removal of fuel subsidies. “The schools are not teaching well and youth unemployment is a problem. There are no jobs and that is why we are all driving taxis.”

Onppug says he pays 400 cedis or $237 in rent a month for a small apartment and earns the same amount and is supported by his fiancé.

Kwabena Agyapong, a 41-year-old father of three and watch seller at an Accra bus station complains about the lack of jobs, the removal of the fuel subsidy, and the increase of utilities.

“The government promised a lot of things that it hasn’t delivered on, like the reduction of fuel costs and the creation of jobs,” says Agyapong. “Ghanaians are suffering.… I haven’t seen any improvement and the prices [of food and basic goods] in the market are coming up.”

Opposition accuses government of overspending

Positions on economic development in Ghana are often highly politicized. In recent months the NPP has accused the government of overspending, referring in particular to a $3 billion Chinese infrastructure loan passed by parliament in September of last year, part of which is being used to fund a $700 million gas infrastructure project.

But Sachs said that the loan could be a wise decision if infrastructure projects are implemented successfully.

“Ghana is taking on a debt like this because it thinks that it can earn a significant rate of return by building out the infrastructure right now,” Sachs says. “I think that is a good judgment. Often it has been held by the international community and the IMF, don’t borrow, you have to pay your own way on infrastructure. But if the returns on infrastructure are high enough it really makes sense to borrow and spur the added economic growth and repay the infrastructure financing out of the dividends of the faster economic growth. That is what Ghana is aiming to do."

But, he warns, if the oil wealth is squandered and the investments go bad, "there isn’t really going to be another chance.”

Economists like Sachs see a positive economic and developmental future for Ghana. But like in other African nations, the distribution of the benefits of economic growth continues to be a concern.

“There is a big infrastructure challenge and there is a big social investment challenge and this emphasizes the fact that growth in Africa right now is highly uneven in where it’s occurring and which sectors it is occurring,” Sachs said. “Part of a good development strategy is to ensure that all parts of society have a chance to participate in growth and break free of poverty. It is a huge task but it is a way to think about the challenge Ghana faces.”

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