Answer to Question #237923 in Macroeconomics for Sniper

Question

MOCK POLICY MAKERS SESSION - ASSESSING KEY MACROECONOMIC
CHALLENGES FOR GHANA IN THE SHORT AND MEDIUM TERM
Prepare a presentation to the President of Ghana on key macroeconomic challenges for
Ghana in the short and medium term

As Ghana Revenue Authority

Answer 1

SHORT AND MEDIUM-TERM MACROECONOMICS CHALLENGES IN GHANA.

Unemployment

Just like other nations of the world, Ghana has had its share of the unemployment crisis over the years. The country has been experiencing four major types of unemployment namely; classical unemployment, frictional unemployment, structural unemployment, and cyclical unemployment. The rate of unemployment in Ghana was about 4.53% in the year 20202. This has become an issue of national concern which needs to be addressed.

Inflation.

Though the inflation rate has been predicted to reduce by the year 2026, Ghana has been experiencing challenges of fluctuating inflation rates. This has eroded the purchasing power of consumers in the country due to lowering the value for money. Inflation in the country is majorly caused by high costs of production, increased tax rates. All these causes either demand-pull or cost-push inflation.

Economic growth

Though the country had the fastest growth of the economy in Africa in the second quarter of the year 2020, it was greatly affected by the outbreak of COVID-19. Projections of Ghana’s economic growth showed that it would increase before COVID-19 came. However, the growth has taken a decreasing tendency since the outbreak began. The country’s economic growth rate was 6.5% in the year 2019 but projection shows it will fall to about 4.1% in the year 2022.