Ghana: Ghana records robust growth in Q4, but expansion for 2016 as a whole still reaches multi-decade low
April 20, 2017
According to a provisional estimate from the Ghana Statistical Service, the country’s economy gained some steam in Q4, rounding off the year with a 4.1% expansion compared to the same quarter of the previous year, up from a revised 3.9% in Q3 (previously reported: +4.0% year-on-year). Despite the robust performance in the final quarter, growth over last year as a whole was the lowest in decades, coming in at 3.5%, with the all-important primary sector dragged down by lower prices for key commodity exports such cocoa and oil. In addition, the government’s precarious fiscal position, with a deficit which ballooned last year, dampened business confidence.
Q4’s uptick was broad-based, with all sectors of the economy expanding. The service sector enjoyed particularly healthy growth, expanding 6.3% (Q3: +4.5% year-on-year) on the back of a stellar performance from the information and communication sub-sector. The industry sector expanded 3.0% (Q3: +0.9% year-on-year), with the electricity sub-sector the standout performer, while agriculture grew 1.9% (Q3: +2.8% year-on-year), thanks to greater revenue from fishing and livestock.
Looking ahead, growth should pick up significantly, as further oil production comes on stream, oil prices rise somewhat and the service sector continues to perform strongly. In addition, the implementation of measures announced in the 2017 budget should help tame the yawning budget deficit and put the public finances on a more sustainable footing, leading to a more certain business environment and encouraging investment.
Author: Oliver Reynolds, Economist