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Ghana: The New Giant of West Africa

It is no longer news that Nigeria was once the giant of Africa; these recent times have called for a re-evaluation of the country’s economic stand and position.

Despite the fluctuations in the world prices from 1960 to 1961, the Nigerian GDP was at a growing rate because exports were on the increase. Food produced by farmers was sufficient to feed the entire nation. Several developmental strides were witnessed across every sphere of the country as a result of the infrastructure put in place from the proceeds of the farm produce.

However, in these current times and seasons, the tables have turned. Critical sectors of the economy have witnessed a lack of exemplary leaders. Both the public and private sectors have suffered leadership gaps. Unfortunately, religious and academic institutions have experienced a lack of quality leaders who are willing to sacrifice their skills, expertise, and time in running the affairs of these institutions to foster growth and development in the country.

Similarly, the Nigeria of today has witnessed aggressive economic declines and has moved from its past glory of being a producer nation to a consumer nation. The Nation has also witnessed a collapse in oil prices coupled with the Coronavirus pandemic. The World Bank Development update on the 25th of June, 2020 stated that if quality and effective economic policies are not quickly implemented in the spike of the pandemic, the nation will go into a severe economic recession.

In contrast, another West African country “Ghana” has risen to a new African Power position. Ghana rose from an economic collapse when revenue from cocoa, the main source of foreign exchange, dived with the fall in world prices before the 90’s to a politically, economically, ethnically, and demographically diverse country.  

Ghana’s economic growth rate stabilized in the early 1990s and induced a development momentum that allowed the country to achieve lower-middle-income status in 2011. Ghana grew at 1.9% per year on average between 1993 and 2005, and 4.5% per year after 2005 (Figure 1(a)), considerably above the averages for non-high-income Sub-Saharan African countries (2%) and for low-income countries (2.6%), and slightly above lower-middle-income countries (LMICs) at 4.4%. This acceleration was in part due to higher prices for Ghana’s main commodity exports, notably gold and cocoa, and the start of commercial oil production in 2011.

In recent times, Ghana has had a higher primary school enrollment than Nigeria which wasn’t so previously. Primary education provides children with basic reading, writing, and mathematics skills along with an elementary understanding of such subjects as history, geography, natural science, social science, art, and music, and these accounts for the 62.02% literacy rate in Nigeria and 79.04% in Ghana.

According to the world bank, the Poverty headcount ratio at national poverty lines (the percentage of the population living below the national poverty line(s)) of Nigeria as of 2018 was 40.1% while that of Ghana dropped from 24.2% in 2012 to 23.4% in 2016. This reflects the level of improvement in Ghana’s Economy.

It is also important to state that the ever-constant wide gap in the Life expectancy at birth in Ghana and Nigeria. Life expectancy at birth indicates the number of years a newborn infant would live if prevailing patterns of mortality at the time of its birth were to stay the same throughout its life. In other words, you are more likely to live longer in Ghana than in Nigeria, all things being equal and the same.

Between 2017 and 2018, Ghana surpassed Nigeria in the area of gross national income the country (GNI per capita). GNI is the sum of value added by all resident producers plus any product taxes (fewer subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad. 2019 holds an accord of $2,030 for Nigeria and $2,220 for Ghana. Although Nigeria has a higher GDP than Ghana, a bigger amount of the GDP ends up leaving the country via importation of foreign products and other avenues. This is why the GNI reflects more on an economy than the GDP. It is also worthy of note that a report published by How We Made It in Africa mentioned that Ghana is 25 times more successful than Nigeria at attracting tourism revenues.

Earlier in April 2021, Twitter made a statement announcing that it will set up its first Africa base in Ghana, West Africa. Twitter described Ghana “as a champion for democracy, a supporter of free speech, online freedom, and the Open Internet of which Twitter is also an advocate. Furthermore, Ghana’s recent appointment to host The Secretariat of the African Continental Free Trade Area aligns with their overarching goal to establish a presence in the region that will support their efforts to improve and tailor their service across Africa.

On the 22nd of April 2021, Ghana’s minister for trade, Alan Kyerematen revealed that the South Korean manufacturers, Hyundai & KIA are set to establish assembly plants in Ghana by the end of 2022 as they would be joining other manufacturers like Toyota-Suzuki, Nissan, Kantanka, Volkswagen and Sinotruck that are already operating in the country.

In addition, having a regular office in Lagos Nigeria, Google, one of the world’s driving internet organizations, picked Accra, Ghana as the area for its absolute first Artificial Intelligence research lab (Google AI Lab) on the continent of Africa.

Business experts believe that before now, what compelled people to come into Nigeria was Nigeria’s large market, but this population has gotten poorer and poorer over the last decade. People’s purchasing power has reduced and it is thus not as large a market as Nigerians have come to believe. When you add to this the current government’s stance on trade and foreign investment; that explains why people are looking at other destinations for travel and investment.

Several other businesses have chosen Ghana as a more favorable economy for doing business and scaling successfully, and many Nigerians are moving to Ghana in search of a better like. Gone are the days of “Nigeria’s Ghana must go”, should we look forward to Ghana’s “Nigeria Must go”?

What the future holds for these two countries is greatly anticipated. As everything rises and falls on leadership, the leadership of this country has a key role to play in the development of the countries.

New Release: The African Economic Congress 2020 Report.