ECONOMY EXPANDS BY 0.4%

The economy expanded by 0.4 per cent last year, the lowest in more than three decades as the COVID-19 pandemic ravaged economic activities and distracted livelihoods throughout 2020.

Data released by the Ghana Statistical Service (GSS) also showed that the economy had returned to the path of growth in the fourth quarter of last year after suffering contractions in the previous two quarters.

The provisional data on the performance of gross domestic product (GDP) was released by the Government Statistician, Prof. Samuel Kobina Annim, at a news conference today.

It further showed that the economy was now worth GH¢404.87 billion, up from the 2019 estimate of GH¢350.79 billion.

Expert opinion

An economist, Dr. Said Boakye, said while the 0.4 per cent annual growth rate was “surprisingly low,” it was comforting that the economy did not suffer negative growth.

“The good news is that it is positive but it is not strong enough to send a good signal to the market that we are on our way out of the woods,” Dr. Boakye, who is the Head of Research at fiscal policy institute, the Institute for Fiscal Studies (IFS), said.

“I expected it to have been higher, around one per cent, but at 0.4 per cent and with the current fiscal situation, then the signals are not good,” he added.

Govt target

The 2020 provisional growth rate of 0.4 per cent is lower than the government’s target of 0.9 per cent for that year.

By that growth rate, Ghana has also outperformed the likes of Nigeria, Botswana, Sierra Leon and Togo, whose economies either contracted or flattened in the pandemic ravaged year.

However, it trailed those of Cote d’Ivoire, Kenya, Ethiopia, Malawi and Rwanda, where growth rates ranged between 0.5 per cent and 4.1 per cent.

Drivers

The 2020 annual GDP data showed that agriculture was the major growth driver, posting a growth rate of 7.2 per cent followed by the services sector, which grew by 1.5 per cent.