Ghana’s economy to continue strong growth despite lurking risks – BoG Governor tells investors

Ghana’s economy to continue strong growth despite lurking risks – BoG Governor tells investors

Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said Ghana’s economy will continue to show strong growth despite risks posed by the Covid pandemic and its ability to derail the economic progress made so far by the country.

Speaking to investors at the Africa Debate Summit and updating them on the current happenings of Ghana’s economy, the Governor noted that government is putting in place prudent macroeconomic policies to ensure the sustainability and further entrenchment of the economic recovery made from the Covid pandemic.

The macroeconomic policies the Governor highlighted include strong revenue measures such as the Revenue Assurance and Compliance Enforcement (RACE) to help shore up revenue to the budget, expenditure rationalisation, debt reprofiling, inflation and exchange rate expectations anchor policies, among others.

“This is an economy that will continue to show strong growth although risks remain in terms of our ability to sustain the progress made with the economic recovery.

The government is committed to implementing prudent macroeconomic policies and is interested in ensuring sustainability as well as financial stability to support the recovery. And so we very much employ you [investors] to continue to have confidence in the economy as you have demonstrated over the years,” he stated.

The Governor’s assertion of a continuous positive growth for the Ghanaian economy is evidenced by the recently recorded 3.9 percent GDP growth for the second quarter of 2021.

The posted positive growth was on the account of a robust growth in the Service and Agriculture sectors.

The Services sector recorded the highest growth of 11.0% and was followed by the Agriculture sector with a growth of 5.5%.

The Industry sector however contracted by 4.3%.

For the Agriculture sector, Forestry and Logging, Livestock and Crops registered growth rates of 11.9%, 5.7% and 4.5% respectively.

With regard to industry, Water supply, Sewerage, Waste Management and Remediation Activities registered growth rate of 20.5%, whilst Electricity, Manufacturing and Construction registered GDP of 9.5%, 8.3% and 2.4%.

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Real Estate (13.8%); Education (11.8%);  Trade, Repair of Vehicle, Household Goods (10.7%); Transport and Storage (7.6%); Public Administration & Defence, Social Security (6.6%) and Finance and Insurance (5.1%) also recorded expansion in their sub-sectors.

On the back of the positive GDP growth, Director for the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has said government’s ambition of achieving a five percentage points GDP growth by the end of 2021 is highly attainable.

Describing the recorded positive growth as ‘signs of a sustained economic recovery’, Prof. Quartey opined that government must prioritize targeted investments into some sectors of the economy to safeguard the growth particularly in the Services and Agriculture sectors which were responsible for the positive growth.

The 3.9% growth rate is quite positive and encouraging. Then if you even look at the non-oil growth rate of 5.2%, it clearly tells you that the economy is certainly recovering. And all things being equal, we are likely to hit an average of 5% GDP by the end of the year.

The 3.9% growth rate is positive because majority of the real sector of the economy have witnessed appreciable expansion and I think the government should continue to invest in the real sector in order to realise the targeted growth rate for 2021,” he stated.