Ghana to experience buoyant economic growth in 2nd half-year – Fitch Solutions

Ghana will experience a buoyant economic growth in the second half of this year due to increase aggregate demand and up-tick in private consumption.

This will offset the relatively slow economic growth anticipated during the first half of this year. According to Fitch Solutions, the research arm of the rating agency, Fitch, Ghana’s economy will grow at a rate of 4.6% Gross Domestic Product (GDP) – same as the International Monetary Fund forecast.

It also said investments will rise, better than last year, but will not significantly impact on the growth rate.

Speaking on its April 2021 Sub Saharan Africa Update, Senior Country Risk Analyst at Fitch Solutions Sub Saharan Africa team, William Attwell, said Ghana is set to remain a regional outperformer in 2021, and Fitch Solutions forecast that real GDP growth will accelerate from an estimated 1.2% in 2020 to 4.5% in 2021.

He pointed out that “growth will increase considerably, following last year’s slump and we expect it to be driven mainly by an up-tick in private consumption. As labour market conditions improve and inflation moderates somewhat, export will also perform well as global demand for commodities such as cocoa and oil rises.”

“Ghana is outperforming other West African markets in terms of the vaccine [covid-19 vaccine] rollout. It is still actually very slow and small scale, and as we expect some social distancing measures to remain in place in the coming months which will of course weigh on confidence and business activities certainly in the first half of the year”, he emphasized.

“You can see on the chart on the right hand side, how confidence level dipped somewhat in February [2021] and a rise in covid-19 restrictions and the consequent tightening of covid-19 restrictions”, Mr. Attwell added.

“But achieving the highest number of vaccinations per 100 people among SSA’s main markets so far, with 2.3% of the population having received their first vaccine dose as of April 11 (latest available data). If this rate of vaccinations is maintained, this will likely lead to an earlier easing of lockdown restrictions compared to most regional peers, and a quicker recovery in consumer spending and business activity”, he further said.

Economy grows marginally by 0.4% in 2020

Ghana’s economy grew at a rate of 0.4% in 2020, beating slightly most institutions and analysts’ forecasts, provisional figures from the Ghana Statistical Service has revealed.

Without oil, the economy however grew at a rate of 1.3%.

Ghana was however among few countries on the African continent that recorded positive growth rates in 2020 in a year that covid-19 impacted negatively on global economies.

There were many expectations that the economy will grow at a rate of at least 1.0% of Gross Domestic Product last year.

According to the figures, the agriculture sector dove the annual GDP with a growth rate of 7.4%.