B&FT Editorial: Q1 GDP growth demonstrates recovering economy

Provisional data from the Ghana Statistical Service (GSS) have shown that the economy grew by 4.7 percent year-on-year in the first quarter of 2024, significantly outpacing the 3.8 percent growth recorded for the same period last year.

This performance underscored the resilience and dynamism of key sectors, positioning the nation on a firm recovery trajectory. The Mining & Quarrying sector emerged as a standout performer, registering a stellar 12.9 percent growth.

The sector’s resurgence also reflects an uptick in global commodity prices.

Also, the Information & Communication sector – pivotal in the digital transformation agenda – surged by 17.9 percent; highlighting robust investments from key players and heightened consumer demand for digital services.

Agriculture, particularly the Crops sub-sector, grew by 4.3 percent while the Construction sector also demonstrated solid growth by expanding 8.2 percent – indicative of ongoing infrastructure projects and increased capital expenditure.

The Accommodation & Food Services sector rebounded strongly, posting 9.4 percent growth as the hospitality industry continues to recover from a pandemic-induced downturn.

These notwithstanding, several sectors experienced contractions. Health sector shrank by 8.8 percent, raising concerns about underlying challenges in healthcare delivery and funding; and also, the Electricity sector’s woes were illustrated by a 7.5 percent decline.

The Public Administration and Education sectors also contracted – by 5.3 percent and 4.9 percent respectively, suggesting possible budgetary constraints and operational efficiencies.

These contractions highlight uneven recovery across different economic segments and the need for targetted policy interventions.

The Services sector maintained its dominance, contributing 45.6 percent to GDP – underscoring its critical role in economic activity. The Industry sector, buoyed by mining and construction, contributed 30.6 percent while Agriculture accounted for 23.8 percent.

Analysts believe the growth figures reflect recovering economic fundamentals and effective policy measures. However, policymakers may need to focus on enhancing healthcare funding, addressing energy supply challenges and improving public sector efficiency to sustain inclusive growth.

While the remainder of 2024’s economic outlook appears optimistic, government must effectively manage sectoral disparities to sustain the growth momentum.