The World Bank has revised Ghana’s growth to 4.9 per cent for 2021, from the earlier forecast of 1.4 per cent of Gross Domestic Product, its latest October 2021 Africa Pulse report has indicated.
It is also forecasting a 5.5 per cent expansion in the economy in 2022, reflecting strong growth in exports.
“Ghana is projected to exhibit growth of respectively, 4.9 per cent and 5.5 per cent in 2021 and 2022, reflecting strong growth in exports. The economy performed relatively well despite the outbreak of the Delta variant thanks to the fiscal support by the government”, the report explained.
The Banks’ June 2021 Global Economic Prospects Report predicted a 1.4 per cent expansion in the economy this year, citing slow growth in most sub-sectors of services and industry.
This is despite expected resilience in agriculture sector which it said would not be sufficient to offset the Covid-19 pandemic’s lingering adverse impact on the oil and other sectors of the economy.
Ghana received the equivalent of US$1 billion in the recent International Monetary Fund SDR allocation, part of which will go to support economic recovery under the COVID-19 Action Recovery and Economic Stimulus (CARES) programme.
The Africa Pulse report said “in an effort to meet its ambitious domestic revenue mobilization targets (starting in 2021), the government is implementing planned spending cuts (starting in 2022) and the Energy Sector Recovery Programme.”
Meanwhile, the West and Central Africa sub-region is projected to experience a growth rate of 3.2 per cent in 2021, up from -0.8 per cent in 2020. The sub-region is estimated to grow further by 3.6 per cent in 2022.
Nigeria is projected to grow from -1.8 per cent in 2020 to 2.4 per cent in 2021, thanks to better performance of both oil and non-oil sectors.
Reducing heavy reliance on the oil sector through diversification of exports and assets will benefit the economy going forward, especially in the transition to a low-carbon economy in the medium term, the Africa Pulse report said.
Ghana’s economy expanded by 3.9 per cent in the second quarter of this year, according to provisional figures from the Ghana Statistical Service.
During the same period last year where Covid-19 had emerged, the Gross Domestic Product (GDP) growth rate was -5.7 per cent.
However, GDP growth rate without oil and gas (Non-Oil GDP) for second quarter 2021 was 5.2 per cent, which is against a growth rate of -5.8 per cent recorded the same period last year.
According to the figures, the increase in the Gross Domestic Product (GDP) growth rate was driven by a strong pick-up in the Services and Agriculture sectors.