Accra, Ghana//-Environmental unsustainability may impair Ghana’s economic growth, as demonstrated through two economic indicators.
Ghana Country Environmental Analysis which revealed this was prepared by the Environment, Natural Resources and Blue Economy Global Practice (ENB GP) of the World Bank in coordination with the Government of Ghana (GoG).
The first is national wealth—the measurement of a country’s assets in produced capital, natural capital (renewable and non-renewable), human capital, and net foreign assets—a gauge of growth sustainability, the 2020 report said.
It noted that between 2000 and 2014, Ghana saw total national wealth more than double. Growth is predicated on efficiently and sustainably managing natural capital—a fact which can be demonstrated through increase in its per capita value over time—and reinvesting proceeds into other forms of capital, primarily human (Lange et al., 2018).
Yet, much of Ghana’s recent wealth growth came with liquidation of non-renewable assets and losses to renewable resources, as well as erosion of produced capital.
Ghana’s high population growth makes this a pressing concern since existing capital stocks must be shared with younger and future generations.
A second related indicator is adjusted net savings (ANS)—defined as gross national saving (national income less consumption, plus net transfers) adjusted for gains in education spending and losses through depletion of subsoil assets and timber resources, and the cost of air pollution to human health—a measure of how wealth changes over time.
If ANS is positive, it is adding to wealth and future well-being; if it is negative it may indicate the country is consuming more than it is saving, using up its assets to fuel present growth, which undermines long-term sustainability (Lange et al., 2018).
In Ghana, dissaving due to natural resource depletion and pollution damage has skyrocketed and ANS has been consistently negative since 2007.
Combined, the two indicators help inform an understanding of some of the linkages between environment and natural resource management and Ghana’s ability to foster future growth by investing in its people. For example, air pollution harms human health through early mortality and morbidity.
From the national wealth perspective this has negative ramifications for the country’s stock of human capital, as it reduces labour force participation and productivity.
The value of this loss is calculated using ANS, which shows a four-fold increase in damage from air pollution over the past two decades.
If its current unsustainable environment and natural resource management remains unchanged, Ghana will see its wealth—its people, its lands, its infrastructure—destroyed over the longterm with less opportunity to sustain growth, share prosperity, adapt to a changing climate, and protect hard won development gains.
Indeed, natural resources have been key drivers of economic growth in Ghana. Over the past 30 years, real GDP in Ghana has more than quadrupled, and in 2011 the country joined the ranks of Lower Middle-Income Countries (LMICs).
Macroeconomic momentum has been driven in part by higher prices for Ghana’s main commodity exports, gold and cocoa, and the start of commercial oil production.
This fits an overall trend that has seen natural resource rents as a percentage of GDP more than double between 1990 and the present; approximately one-half of these rents come from non-renewable sources (oil, mineral, natural gas).
Culled from Ghana Country Environmental Analysis http://documents1.worldbank.org/curated/en/419871588578973802/pdf/Ghana-Country-Environmental-Analysis.pdf
African Eye Report
