Question
After nearly a decade of strong growth fueled by the commodities boom, which ended in 2010-11, Ghana's economy remained undiversified and vulnerable to external shocks,
After nearly a decade of strong growth fueled by the commodities boom, which ended in 2010-11, Ghana's economy remained undiversified and vulnerable to external shocks, with high levels of poverty. About 40 percent of workers work in non-wage agriculture and most urban workers are in lowproductivity informal jobs. Ghana has also suffered in recent years from a self-inflicted energy crisis, leading to macroeconomic instability and a financial sector weakened by high levels of bad loans. Ghana's ability to attract sizeable (domestic or foreign) investment is hampered by constraints of the real sector at four levels. First, domestic demand (market size) is insufficient to attract large investments that can benefit from economies of scale, unless these are export-oriented. Second, macroeconomic instability creates uncertainty for investors. Third, inadequate availability and reliability of basic infrastructure, such as energy and transport, and difficult access to land, deter investment. Fourth, weak managerial and entrepreneurial skills reduce firms productivity. Source: World Bank Report on Creating Market in Ghana, 2017 2 Required: a) Discuss two solutions to the constraints of the following real sector; I. Agriculture Sector II. Industry Sector III. Service Sector (12 marks) b) Propose one initiative for the Agriculture sector that Ghana can be implemented in order to change the social economic fortune of the nation. (8 marks)
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