Economy slows in Q3 2022 to 2.9%

Ghana’s economy showed mixed results in the third quarter of 2022, with the country’s provisional real quarterly gross domestic product (QGDP) growth rate including oil and gas coming in at 2.9 percent year on year, according to data released by Ghana Statistical Services.

This marks a slowdown from the 6.5 percent growth rate seen in the same period of 2021. The growth is the lowest in eight quarters during the COVID-19 pandemic, since 2020 Q3 when GDP logged at -3.3 percent.

Breaking down the data further, the Government Statistician, Professor Samuel Kobina Annim, on release of the Q3 2022 GDP data noted that the slow growth was largely due to the Industry sector with a growth rate of 0.9 percent – mainly through contraction of the manufacturing and construction subsectors to -1.8 percent each, quarter on quarter.

Per the data, the Agriculture sector recorded the highest growth rate of 4.6 percent, followed by the Services sector with a growth rate of 3.9 percent. When the Oil and Gas sector is excluded, the Q3 2022 GDP growth rate was 3.6 percent compared to 8.2 percent in the same period in 2021.

On a seasonally adjusted basis, Ghana’s QGDP growth rate (including oil) was 0.7 percent in the third quarter of 2022.

Economic activities as tracked by the central bank

Similar to the GDP data released, the economic activities as tracked by the central bank’s real Composite Index of Economic Activity (CIEA) also slowed for a second consecutive period ending the third quarter of 2022, contracting by 1.2 percent. This contraction is down from the 11.1 percent recorded a year earlier, and also from the 1.6 percent recorded mid-year 2022 according to the Bank of Ghana’s Summary of Macroeconomic and Financial Data.

Largely, the latest high-frequency indicators as measured by the Bank point to some moderation, on the back of weakened consumption, trade and construction activities. The main indicators that dragged down the Index were domestic VAT, ports activity and cement sales.

Sectorial Quarterly Growth

Compared to the second quarter of 2022, when the Agriculture sector grew by 0.9 percent, it increased by 1.0 percent in the third quarter. Going from 1.7 percent in the second quarter of 2022 to 2.7 percent in the third quarter, the fishing subsector saw a gain of 1 percentage point.

The crops and cocoa subsectors saw a slight improvement in growth, moving from 0.8 percent in the second quarter of 2022 to 0.9 percent this quarter. From 1.2 percent in the second quarter of 2022, the Livestock subsector saw a dip to 1.1 percent in the current quarter. In the third quarter of 2022, the Forestry and Logging subsector grew by 1.1 percent.

In the Services sector, the information and communication subsector saw particularly strong growth of 4 percent in the third quarter, while the health and social work activities and education subsectors recorded growth of 2.2 percent and 2.8 percent respectively.

However, there were contractions in other areas of the Services sector, including public administration, defence and social security, which saw a marginal decline in growth from 2.0 percent in the second quarter to 1.2 percent in the third quarter.

Within the Industry sector, the mining and quarrying subsector showed particularly strong growth, expanding from 1.5 percent in the second quarter of 2022 to 3.6 percent in the third quarter. However, the manufacturing subsector saw a contraction of 1.8 percent in the third quarter, and there were also declines in the construction, electricity and water supply, sewerage, waste management and remediation activities subsectors.

Overall, while some sectors of Ghana’s economy showed strong growth in the third quarter of 2022 others struggled, resulting in a slower overall Q3 2022 growth rate compared to the same period of 2021. It remains to be seen whether these trends will continue in the coming months, and whether Ghana’s economy will be able to maintain its momentum.