1. ECONOMY OF GHANA

2. NAME INDEX NO. Danso Olivia Kumi 12BAR107 Essandoh Gifty 12BAR115 Ameyaw Stephen 12BAR133 Awuku Angel Theodora 12BAR119 Adom- Adade Gifty 12BAR109 Bedi Godson Yaw 12BAR117 Nartey Felix Tetteh 12BAR135 Offei Awuku Eugene 12BAR122 Benjamin Acheampong 12BAR116 LECTURER: DR. RAYMOND DZIWORNU

3.  What is SAP and ERP?  Why SAP and ERP?  Performance before SAP/ERP.  Performance after SAP/ERP.  Has SAP and ERP achieve its goals?

4. During the 1950-60, GDP grew annually by 4.1 % and agricultural output by 4.3 %. High growth in the output of the major export crop, cocoa, provided the basis for rising investment via increased foreign exchange availability. With export earnings rising at 3.2 % per annum during the nineteen-fifties, both imports and gross domestic investment grew at 8.9 % per annum during the decade. Industrial output also rose at 6.7% per annum.

5.  Economic Recovery Programme (ERP)-1983/86  Structural Adjustment Programme­­ (SAP)-1986/90 To reverse the deterioration in the economy since 1970, and resume, sustain and accelerate growth, Ghana launched the ERP and­­ SAP. Were supported by the World Bank Group and various facilities of the IMF including the enhanced structural adjustment facility (ESAF) and other concessional assistance.

6. The ERP and SAP was implemented because of the following: 1. Persistent high inflation. 2. Decline in production and export. 3. A decline in per capita income increased poverty. 4. A worsening of income distribution. 5. Growing unemployment. 6. Flourishing illegal activities. 7. Emigration of skilled professionals. 8. Political instability.

7. Performance of the Economy before and after ERP and SAP Variable Annual average 1978-83 ( Before) Annual average 1984-90 (During) Annual average 1991-94 (After) Real GDP Growth -1.34%5.4%4.5% Balance of Payments (US$) Trade Account 47.5-97.4-449.2 Current Account -99.8-101.0-36.1 Overall Balance -102.098.359.7 Fiscal Deficit as % of GDP -5.950.21-1.3 Broad Money Growth 36.6%50.0%46.4% Gross Fixed Capital Formation as % of GDP 5.210.814.8 Inflation(CPI) 73.7%29.8%19.9%

8. Variable Annual Average 1984-91 (PLAN) Annual Average 1984-91 (ACTUAL) DEVIATION Real GDP Growth 5.11%4.6%-0.45% Balance of Payments (US$) Trade Account -135.7-334.7-199.0 Current Account -342.6-268.074.6 Overall Balance 111.7130.018.3 Fiscal Deficit as % of GDP -7.3-5.22.1 Broad Money Growth 20.255.9-35.9 Gross Fixed Capital Formation as % of GDP 1814.4-3.6 Inflation(CPI) 22.3028.30-6.00%

9. Using this analysis, the ERP/SAP appears less successful. The real GDP growth rate fell slightly below target, whilst inflation, domestic savings, gross fixed capital formation, broad money growth and the balance of payments, trade account, all missed their targets by a significant margin. Only government budget deficit and the balance of payments current account and overall balance did actual outcomes surpass the target.