Ghana’s economy is on the path of rapid recovery beyond all projections as it grew at 5.4 percent last year above 5.0 percent growth rate predicted following the devastation of global economies by the COVID-19 pandemic.The higher-than-projected growth rate for 2021 has also reduced the debt to GPP ratio from above 80 percent previously recorded to 76.1 percent, strengthening the hopes of government that the country is on its way to full recovery from the effects of the pandemic.
Ghana’s economy suffered massive decline with a growth rate of 0.4% and high budget deficit in 2020 as government spent billions of cedis to save lives in the country.
This was because President Nana Addo Dankwa Akufo-Addo indicated he was determined to spend above budgetary allocations to prevent the spread of COVID-19 and to save lives, saying “we know how to bring back the economy, what we do not know is how to bring back lives”.
As promised by the President, the economy grew at a faster rate in 2021 than the Akufo-Addo government and international bodies had even projected.
Provisional data from the Ghana Statistical Service (GSS) showed that the 2021 growth rate was also much healthier than the revised growth rate of 0.5 per cent for 2020.
Government Statistician Prof. Samuel Kobina Annim who released the data on Wednesday indicated that the economy was now worth more than GH¢459.13 billion in 2021 compared to 2020 when it was valued at more than GH¢391.94 billion.
The data, he added, showed that non-Gross Domestic Product (GDP) grew by 6.9 per cent last year.
Targets exceeded
The growth rate of 5.4 per cent for 2021 showed that the government exceeded its growth target for the year, which was pegged at 5 percent in the 2021 budget statement, which was later revised downwards to 4.4 per cent in the 2022 budget statement last November.
The provisional real GDP growth rate is also higher than the estimates by the Bretton Woods institutions for the period.
Last year, the International Monetary Fund (IMF) and the World Bank projected that the economy would expand by 4.7 per cent and 4.1 per cent respectively, compared to 5.4 per cent growth rate announced.
The government statistician said it also meant that the economy was recovering quickly from the COVID-19 pandemic than initially anticipated.
He however cautioned against assumptions that the economy has fully recovered as the data showed that growth has not fully returned to the pre-pandemic levels.
According to Prof. Annim, pockets of challenges still remained as evidenced in the sluggish growth and contractions exhibited in some sub-sectors of the economy.
Growth drivers
The Government Statistician said the data indicated that last year’s growth rate was driven by strong growth in the fourth and third quarters.
He said overall GDP growth was also driven by large expansions in the services and agricultural sectors, as the industry sector suffered a contraction in growth.
Prof. Annim explained that whilst the services sector expanded by 9.4 per cent, the agricultural sector grew by 8.4 per cent.
He pointed out that the growth in the services sector was led by 33.1 per cent growth in the information & communication sub-sector, which recorded the highest year-on-year GDP growth rate.
Public administration, defence and social security sub-sector, Prof. Annim added, also grew by 25.5 per cent whilst the real estate sub-sector expanded by 11.9 per cent last year.
However, growth in the education sub-sector contracted by 3.7 per cent, making it the worst growth rate in the services sector.
Agric sector
On the agricultural sector, Prof. Annim said the fishing sub-sector recorded the highest year-on-year growth rate of 13.4 per cent while the forestry and logging sub-sector recorded the lowest growth rate of 4.7 per cent.
He said the crops sub-sector also grew by 8.9 per cent, driven largely by a 10.8 per cent growth rate in cocoa production.
Oil and gas
The government statistician said the data further showed that the industry sector contracted by 0.8 per cent as a result of a 12.1 per cent contraction in the mining and quarrying sub-sectors.
He said the water and sewerage sub-sector recorded the highest year-on-year annual GDP growth rate of 13.3 per cent for 2021, followed by the manufacturing sub-sector which expanded by 7.8 per cent.
Prof. Annim said mining and quarrying sub-sector recorded the lowest growth rate with a contraction of 12.1 per cent.
He noted that petroleum production, which the GSS captures as oil and gas under the mining and quarrying sub-sector, also suffered a contraction in growth last year.
The data showed that growth in that sub-sector declined by 12.4 per cent in 2021.
