Ghana - Current economic position and prospects (Vol. 2 of 10)

RESTRICTED P7s Onn v AW18 4'1 i 1,,4EJ Vol. 2 This reiport was prepared for use within the Bank and its affiliated organizations. They dlo not accept responsibility for its accluracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNAMIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT IN 1 IER UINAL D)tVELOPME 1N T AbSUS IA iION THE CURRENT ECONOMIC POSITION AND PROSPECTS OF GHANA (in -en volu;.nes) VOLUME II ANNEXES TO THE MAIN REPORT October 26, 1970 Western Africa Department  CURRENCY EQUIVALENTS 1 New Cedi X US$0.98 1 dollar N, 1.02  THE ivCSSION This report is based on the findings of a mission in April and May 1970 to Ghana composed of: Mr. Barend A. de Vries Chief of M:ission Mr. Fateh Chaudhri Gesneral Economist Mr. Thomas Klein Balance of Payments & External Debt Miss Katharine Mortimer Population, Employment and Education Mr. M. Taher Dajanli Fiscal Mr. Ved Gandhi Fiscal Mr. Nake Kamrany Social Sector Mr. Jivat Thadani Industry Mr. Alfredo Soto Transport Mr. Hans Schulte Transport Mr. Charles Metcalfe Agriculture Mr. Bruce Johnston' Agriculture Mr. Merrill Bateman" Cocoa Mr. Herman Nissenbaum Project List Mr. Edward Minnig Electric Power Mr. John Weston Electric Power Mr. S. Rangachar Research Miss Beverley Baxter Secretary * Seconded by the International Monetary Fund ~*7 Consultants  VOLUME II Table of Contents Page No. I ALTERNATIVE GROWTII AND IMPORT PROJECTIONS .... ....... 1 A. Alternative: I ................................. 1 B. Alternative: II ................................ 2 II IMPORTS BY END-USE. 1968-1969: PROGRAM AND ACTUALS COMPARED ......... ............................... 5 III BALANCE OF PAYMENTS PROJECTIONS, 1970-80 .... ........ 7 Resource Gap ......... ............................... 7 Private Capital ........ ............................. 9 Short-Term Debt ..................................... 10 Crown Agents Account ................................ 10 LIMF Accounts ......... ............................... 11 Net Foreign Exchange Reserves and Bilateral Balances .......... ................................ 11 Debt Service on Existing Debt ....................... 11 Terms of New Lending ................................ 11 IV EXTERNAL DEBT ......... .............................. 12 The Debt Situation in 1966 .......................... 12 The 1966 and 1968 Debt Rescheduling . ................. 13 External Debt: Present Status ..... ................. 19 The July 1970 Debt Conference ....................... 19 STATISTICAL APPENDIX Table No. 1 Expenditure on Gross National Product 1957-69 (At Constant 19 6 P rif ocs ) . __ 2 Expenditure on Gross Nat4onal Product 1960-69 (At Constant 1968 Prices). 3 Projection of Expenditure on Gross National Product, 1970-80 Alte.,.ative I & II. 4P.-ojection of: B:alance of National Resouxrcees (At- Const-rt 1968 Prices), 1970-80, Alternative I & II. 5 Recent Fiscal Trends, 1961-1968.  6 Capital Expenditure of Central Government 1965/66 - 1970/71. 7 Budget Projection, 1969/70 - 1974/75 (Low Growth Assumption). 8 Budget Projection, 1969/70 - 1974/75 (High Growth Assumption). 9 Existing Production Estimates and Projected Consumption of Selected Commodities; 1975/80. 10 CGsna: Production; Exnortg- Volume; Value and Pricesj 1950-70= 11 Vli nf Grnoss Outniit in rGurrent P r^es for M-nufacturing Activities by Main Groups 1962-69. 12 Central Government Expenditure on Social Sector. 13 Monetary Survey - 1967-69. 14 Changes in Money Supply & Prices 1963-69. 15 Consumer Price Indices, March 1963 = 100. Urban & Rural 1963-1969. I A-- Wholes A. Pricel .Jf Selected Fr a A. '.JL IJUS_ -|ag T VCLGE, V lU C C * LC V C t W X_ I UU - !QCO *RV I 7V} 17 UhTt-ollesale Prices and 1t ,hin==Yea.r PriLce variations 'for Selected Food Commodities 1963-1969. 18 Balance of Payments, Internaticinal Reserves, External Debt and lp n r- '7_,C fl ~ ~ ~ ~ - fl~ Iff I e riL ofL Trad'e, 19,7-69 U. 19 Comitpositiorn of Imp orts (c.i.f..) and Exports F.0.B. 1957- 196 (Percentages). 20 Exports 1959-1969. 21 Imports by End-Use 1959-1969. 22 Imports of Farm Products by Quantity 1958-1969. 23 Imports of Farm Products by Value 1958-1969. 24 Total External Debt: Outstanding Debt as of December 31, 1969 and Scneduled Debt Service Payments, 1970-81. 25 Suppliers Credits: Outstanding DeDt as or December 31, 1969 and Scheduled Debt Service Payments, 1970-81. 26 External Aid Commitments & Disbursements. Appendix: Tables on External D)ebt and Debt Service.  I ALTERNATIVE GROWTH AND IMTORT PROJECTIONS A. Alternative: I 1. Alternative I presents the proftle of the economyv under a low growth, low savings regime in which the gross domestic product (GDP) grows at 3 nercent average annual rate and gross domestic investment/GTDP ratio remains around 12.5 - 13.0 percent, yielding an incremental capital output ratin of abou1t 462 throighoiit the nridnc 1970-R8Q Ulnfder t-hica q1ternatlvP gross domestic savings increase at 4.2 percent per annum and show a marginal rate of 15.0 nperent nver 1970-R80 increasing the ratio of gross domtnti savings/GDP from 10.3 percent in 1970 to 11.5 percent in 1980. This alter- native allows total consumnt-in tn incroace at a rate of 2.9 percent per annum. Under this alternative, import of goods (c.i.f.) increase at a yearly rate of about 3.4 percent per annum during 1970-80. Thae ratio of total imports to GDP remains around 16 to 16.5 percent. The import esti- mates are based on the follou4ng asumptIons. 2. Under th4a alte.rn-ave we do -t--no p ulat- arny major polic- shifts. .JL.tL .LE a~~...-AL- Vtf-_ t -_ F - - - yO.a t% .. ly...a t . n.... It is assumed that under given incentives, cocoa production will grow at about 4 percent per ann. and non-cocoa agriculture, principally such st-aple foods as rice and maize, will grow at least as much as population growth (or about "A percent per annu,m.) so that all incremental- A-marA for basic food will be met domestically and per capita consumption will just be main- tai.ned. The do..est. catch of fish 4is assumed to rize by abouxt L 7.5 t Co 8.0 percent per year. Domestic production of sugar is also expected to .-I.ke reasona0ble h0-Lead .away so t.hlat all incre.ental .ULemandUL for sugar arising from population and income growth is met from increased domestic production. ^_.1 te oth-er h'andu, 4-'mr susitto Lf .r,ul ar.d rilk. pro%ducts, mlea-t and 1411 L.LL LII .L1 aL, LLLJ L ..UOpLrt su s i ution 14. 1 II, L OL LLLL p 1UUL IIOL OL meat preparations as well as livestock, is not expected to take place at any apprei_bl 'LveL so tha LILs comoite cotiu ,Lo le _impor ted. & to met-__&_ LPCL