The size of the Ghanaian economy grew by 3.9 percent in 2015, the slowest in 15 years, on the back of a slump in commodities prices and energy supply deficit, the national statistics office has reported.
According to figures from the Ghana Statistical Service, the last time the economy recorded growth below 4 percent was in 2000 when GDP, which measures the value of final goods and services produced in the country, decelerated to 3.7 percent.
The latest GDP figures, albeit provisional, are expected to serve as an encouragement to government of a rebound in economic activities, as Finance Minister Seth Terkper in June last year announced to Parliament that government had revised its expectation of economic growth for 2015 from 4.1 percent to 3.5 percent.
The Deputy Government Statistician, Baah Wadieh, at a press briefing in Accra on Wednesday said that the economy’s biggest growth period was recorded in the last three months of 2015, following improvement in the erratic energy supply challenges which forced businesses to cut production output.
He said the GDP figure for the fourth quarter was 4.9 percent, which is more than the 3.7, 3.3 and 3.6 percent recorded for the third, second and first quarters respectively.
The sector that performed highest in the fourth quarter was Industry, which recorded negative growths in the previous two quarters. The sector grew in the quarter by 7.2 percent, the highest for the sector in any quarter of a year since the second quarter of 2013. This was followed by the Services sector which recorded a growth rate of 5.2 percent in the fourth quarter, with the Agricultural sector trailing behind with a growth rate of 4 percent.
According to the Ghana Statistical Service, at current market prices the Ghanaian economy is now worth about GH?139.9billion. However, when adjusted for inflation, the value of the economy is a little above GH?34.8billion in constant terms from 2006.
Government is hopeful that this year economic activities will rebound with a projected real GDP growth of 5.4 percent -- despite the International Monetary Fund, which is helping in management of the economy under a three-year Extended Credit Facility programme, lowering Ghana’s economic growth in 2016 to 4.5 percent as a result of the continued fall in prices of commodities on the world market.
However, the country’s fiscal managers are confident improvements in energy supply will boost economic activities and cause businesses -- which performed at half their capacity or shut down completely at the peak of the energy crisis last year -- to ramp-up output.
According to government officials, the economy would have recovered from the commodities price shock experienced last year and expanded faster than it did had the energy challenges been addressed earlier.
This is underscored by Mr. Wadieh, who opined that “but for the energy crisis, the industrial sector would have grown beyond the 7.2 percent”.
It is worthy to note that industry’s performance last year largely depended on the water and sewage sub-sector, which contributed 26.9 percent to the industrial sector with construction taking 6.2 percent, while oil and gas contributed the least with 0.3 percent.
Health and social work also contributed 18.2 percent to the Services sector; with public administration, defence and social security contributing 17.1 percent, while education and finance recorded 10.5 percent and 7.2 percent respectively; thereby taking the sectoral contribution to GDP to 49.6 percent.