Answer to Question #174388 in Economics for Edmond

Question

1.Identify and discuss economic, benefits of any two current Ghana's economic formalization and digitization agenda.

2.Precisely state the rate of five macroeconomic indicators, expected revenue and expenditure to be achieved in the 2021 budget statement presented in Parliament by the Finance Minister.

3.Ghana as a member of the ECOWAS has signed to the use of the ECO currency,

i. State the conditional requirements for Ghana to be part of the ECO States

ii. State and explain the economic benefits of the usage of ECO currency

iii. What are the challenges Ghana is likely to face as a member of ECO states?

Answer 1

1) There are several Ghana's economic formalization and digitization projects such as ensuring unique identification (Ghana Card), seamless payment system (Mobile Payments Interoperability), improved access to education (Free SHS, E-education). These economic formalization and digitization projects can reduce poverty, increase GDP and strengthen economy.

2) Total revenue and Grants -> 72,452 (16.7% of GDP);

Total expenditures -> 113,750 (26.2% of GDP);

Overall fiscal balance (cash) -> -41,298 (-9.5% of GDP);

Primary balance -> -5,434 (-1.3% of GDP);

Nominal GDP -> 433,686.

3) i) ECOWAS members wanting to join the Eco are required to meet four basic criteria:

- The single-digit inflation rate at the end of each year;

- The fiscal deficit of no more than 4% of the GDP;

- The central bank deficit-financing of no more than 10% of the previous year’s tax revenues;

- Gross external reserves that can give import cover for a minimum of three months.

ii) There are several economic benefits of the usage of ECO currency: removal of trade barriers, reduce transaction costs, boost economic activities and raise the living standards of the member nations.

iii) As a member of ECO states, Ghana is likely to face with such challanges as violent extremism, piracy, political instability, elections-related violence and drug traffick.