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Abstract
Ghana is an emerging success story in Africa and in a couple of years will become the first African
country to achieve the first Millennium Development Goal of halving its national poverty rate. The
government of Ghana has therefore extended its development vision and recently declared the goal of
reaching middle-income-country (MIC) status by 2015. To analyze possible pathways and implications of
achieving MIC status, this paper examines other countries’ experiences on their way to becoming MICs
and emphasizes the important role of growth acceleration, export diversification, and economic structural
change in the transformation process. The paper further analyzes Ghana’s growth options and their
structural implications using a dynamic computable general equilibrium model recently developed for
Ghana. The results of the model simulation suggest that Ghana’s annual GDP growth rate must accelerate
from the recent 5.5 percent to 7.6 percent to achieve MIC status by 2015. Unlike in other countries,
agriculture in Ghana is likely to remain the mainstay of growth and export earnings, while the role of
manufacturing growth in achieving MIC status may be constrained by the manufacturing sector’s
dependency on agricultural inputs and small size. Services may not become the prime mover of
accelerated growth, but improved efficiency in trade, transport, and business services will be a key for
growth acceleration in other sectors.