If all economies move in cycles, Ghana’s sometimes looks like an unwieldy tandem. Annual growth in gross domestic product has climbed steadily from 4 per cent at the start of the decade to more than 7 per cent last year. Even if official 5.9 per cent growth forecast for this year proves over-optimistic, the country is faring better than most.
But the numbers mask two wheels whose gyrations play havoc with public finances and private endeavour. One wheel is driven by commodities, the other by politics. Gold and cocoa account for two-thirds of exports. Prices for both have reached record highs as investors and consumers seek the consolations of bullion and chocolate in troubled times. Yet the commodities market cuts both ways. When the crude price rose to almost $150 a barrel last year, a surge in Ghana’s petroleum import bill drove the current account deficit to the equivalent of about a quarter of GDP.
