CHAPTER 3 constraining factors. As capacity increases can be costly, the extent to which capacity should be “installed” is not an easy decision. Stakeholders nevertheless feel that, in many cases, the government can afford much more capacity than it has in place. It should therefore be encouraged to enhance its capacity in certain critical areas of state services. 42. Concerns over capacity and its effect on the supply of public services often has to do with the distribution of available capacity. Moreover, areas where capacity could be increased at very low costs but with major returns are sometimes neglected. This would greatly expand the productivity of government expenditure, with substantial returns in terms of macroeconomic performance. For instance, the overall productivity of the government would be improved if some capacity increases in the regions took place at the expense of Accra and the central government (that is, with no overall increase in central government expenditure). For instance, such redistribution would allow certain fiscal and functional decentralisation changes to take place, resulting in improved efficiency in government. 43. Capacity constraints have greatly affected the ability of the authorities to design and implement macroeconomic policies for stability and growth. This includes agricultural and other sectoral policies and the mobilisation of domestic resources. The analytical capabilities of various departments and agencies of the central government and the districts are thought to be weak, notably the Ghana Statistical Service and the Policy Analysis Department of the Ministry of Finance and Economic Planning. Economic development challenges 44. A major concern of the participants (which is also well documented in the CSAR), is that Ghana would be faced with many demands over the next several years or even decades. Some of these challenges are exogenous, such as world oil prices and fluctuations in the world prices of Ghana's exports. The authorities would have to counter their negative impact with appropriate policies. Other challenges do not depend as much on world economic forces, but would equally test the resolve of the authorities and the cooperation they are able to elicit from the private sector and civil society. Looming large among these challenges were the continued maintenance of macroeconomic stability. There is also a need to effect structural transformation of the economy and export diversification, such as would raise the growth rate from about 5% to approximately 9% in the very near future, and for many years. 60