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REGENT UNIVERSITY COLLEGE OF SCIENCE AND TECHNOLOGY

VIVIAN AKU DZOMEKU

1460206
ECONOMY OF GHANA ASSIGNMENT 6/1/2012

Lecturer: Francis Agbewali

1A I. Ensuring and Sustaining Macroeconomic Stability II. Enhanced Competitiveness of Ghana's Private Sector III. Accelerated Agricultural Modernization and Natural Resource Management IV. Oil and Gas Development V. Infrastructure, Energy and Human Settlements Development VI. Human Development, Employment and Productivity VII. Transparent and Accountable Governance 1B Ghana is unable to achieve food sufficiency because of the following reasons; Inadequate storage facilities to store harvested commodities for future use. The proportion of the population in farming is high but the sizes of farms are relatively lower. Most farmers cultivate just small scales because of inadequate credit for expansion and buying of machines for mechanized farming. Majority of the farmers depend mostly depend on the rain for their farming activities and due to climate change this affect the agriculture output in the country. Extension service in the country is very low hence most farmers are still using the primitive way of farming hence output is very low. 1C Five Features of the Ghanaian Economy that makes it an Under-developed country; The country GDP is highly dominated by the agricultural sector activities. The per capita income is less $2000 High Unemployment rate. The government depends on mostly goner agencies for financing the highest proportion of its budget
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Over 50% of the population are illiterates and has no basic education.

ID Four Functions of the Private Sector

Contributes to Employment, Corporate Social Responsibility-Taking project such as school buildings, roads for communities. Payes Taxes to government Export Products and Services and earns foreign exchange which help in economic growth

1E I. EPA-Economic Partnership Agreement: aimed at redefining the trade regime between the two groups of countries, replacing the system applicable since Lom 1.

II.

AGOA- African Growth and Opportunity Act:The purpose of this legislation was to assist the economies of sub-Saharan Africa and to improve economic relations between the United States and the region. "The African Growth and Opportunity Act represents a trade-centered approach to development that will complement traditional forms of assistance," said Crane in introducing the bill. Increased U.S.-African trade and investment is a win-win proposition, one that can facilitate and strengthen the development of sub-Saharan African countries and create opportunities for U.S. firms and workers."

III.

HIPC INITIATIVE: The Heavily Indebted Poor Counties (HIPC) Initiative was launched in 1996 by the World Bank and the International Monetary Fund (IMF) with the stated goal of assisting poor countries with unsustainable debts. The World Bank says that HIPC aims to provide a fresh start to countries struggling to cope with foreign debt that places too great a burden on export earning or fiscal revenues.

IV.

SAPS/ERPS-Structural Adjustment Programs: They are loan facilities designed to encourage the structural adjustment of an economy by, for example, removing excess

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government controls and promoting market competition as part of the neo-liberal agenda followed by the Bank. The Enhanced Structural Adjustment Facility is an IMF financing mechanism to support of macroeconomic policies and SAPs in low-income countries through loans or low interest subsidies.

V.

GRPS I& II-Ghana Poverty Reduction Strategy: The goal of the GPRS is to become a middle-income country with a per capita income of at least $1000 by the year 2015 within a decentralized, democratic environment. The main objective of GPRS II is to grow the economy at a rate double what we are currently doing. SADA-Savannah Accelerated Development Agency: The agencys main thrust is to promote sustainable development using the notion of a forested and green north to catalyze climate change reversal and improve livelihoods of the most vulnerable citizens in the area. The strategy being developed will provide opportunities for poor peasants, especially women, to own assets in economic stress sustain their food crop production and protect the fragile eco-system of the northern savannah by managing the flood-prone river-beds better.

VI.

2.

5 Key Developments in Agriculture The National Food Buffer Stock Company (NAFCO) was established during the year and the company purchased and stored 6,949 metric tons of rice and 416 metric tons of maize. 60,000 metric tons of fertilizer was subsidized at an average cost of GH16 per bag for distribution to farmers under the Fertilizer Subsidy Program 1n 2010. 2,584 livestock of various improved species were supplied to farmers in 6 regions. In addition, 35,000 cockerels were supplied to 1,750 farmers in 25 districts in 2010 US$2.0 million was disbursed to farmers and small and medium term enterprises under the Alliance for Green Revolution in Africa (AGRA) project; and GH4.0 million Agricultural Credit was disbursed to various farmers for extension from small to large scale mechanized agriculture.

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3. Main Sectors of the Ghanaian Economy

The Agriculture Sector E.g. Livestock The Industry Sector E.g. Mining and Quarrying subsector The Services Sector E.g. Information and Communication

4. Four Factors inhibiting growth of Agriculture in Ghana; Inadequate Supply of Credit to farmers Over-Reliance on Rainfall. The proportion of the farmers who are farming or are in agriculture are only farming on small scale just to feed their selves and families and a little to sell. There are inadequate extension services to farmers to broaden their knowledge on best and improved ways of farming Government is yet to come with incentives that will compel the bulk of the youth to join the agriculture sector.

5. Goals of MDG in regards to development policies in Ghana

Eradicate extreme poverty in Ghana Achieve Universal Access to Primary Education by 2015 Reduce Under-five Mortality Rate by two-thirds by 2015 Integrate the principles of sustainable development into country policies and programmes and reverse loss of environment resources by 2015 Deal comprehensively with LDC debt and make debt sustainable in the long run

6. Governments Revenues Import Tax-This are taxes levied on importation of various items into the country. Income Tax-This are taxes paid by individuals who earn income Grants-This are long-term loans giving by donor countries and agencies with little or no interest

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Aids-this are moneys giving by donor agencies and countries that are not payable to support development in a country. Tolls-This are levies such as road tolls, market tolls, lorry station tolls etc.

7. Ghanas Oil Found Ghana oil found is not a definite step to development, several countries such as Nigeria is reported to have made about $6 Trillion from pumping oil but still it is not one of the vibrant economies in the world due to some reasons best know by politicians. Unless the oil is managed well with the right expertise and facilities, Ghana will achieve just little funds from the oil fields, almost all monies that are made are used to pay foreign expatriates who have the required skills in petroleum exploration. A country like Nigeria still import over 50% of its petroleum needs due to the fact that they dont have the capacities to refine the crude oil in their own country and this is the same thing Ghana has also started we sell the crude and buy the refined, government is yet to resource the Tema Oil refinery to a capacity that can let them refine at least the oil that we can use domestically, In my opinion oil found is not definite to sustained growth and development in Ghana.

8. Write the following Terms: Liquidity Trap: A liquidity trap is defined as a situation in which the short-term nominal interest rate is zero. In this case, many argue, increasing money in circulation has no effect on either output or prices. The liquidity trap is originally a Keynesian idea and was contrasted with the quantity theory of money, which maintains that prices and output are, roughly speaking, proportional to the money supply.

Quantitative Easing: is an unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank buys financial assets to inject a pre-determined quantity of money into the economy. This is distinguished from the more usual policy of buying or selling government bonds to keep market interest rates at a specified target value. A central bank implements quantitative easing by

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purchasing financial assets from banks and other private sector businesses with new electronically created money. (Wikipedia, 2012)

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