Signs of the government’s envisaged slow economic growth for 2023 begin to show as Ghana’s Gross Domestic Product (GDP) rate, including Oil and Gas declines to 3.2 percent for the second quarter of 2023.
The country’s GDP increased by 0.7 percent in quarter two (April to June) of 2023, but a 0.1 percentage point lower than what was recorded in quarter one of 2023 (January to March), which was 3.3 percent.
This is according to 2023 second quarter provisional data provided by the Ghana Statistical Service (GSS).
On a year-on-year basis, “oil GDP grew in Q2 of 2023 by 3.2 percent, indicating a 0.3 percentage drop for the same growth rate recorded in Q2 of 2022,” Professor Samuel Kobina Annim, Government Statistician explained.
“In Q2 of 2022, the economy grew by 3.5 percent, and in Q2 of 2023, we’ve seen the economy growing by 3.2 percent, indicating a slowdown in the growth rate relative to the same period, Q2 2022” he added.
In an interview with the media, Mr Edward Asuo Afram, Director, Economics, GSS, attributed the Q2 growth decline to a general downward turn in economic growth, largely led by Industry, which contracted by 1.9 percent.
On a sectoral basis, the Services sector recorded the highest growth of 6.3 percent, followed by Agriculture with 6.0 percent growth, while Industry contracted by 1.9 percent for the second quarter of 2023.
Prof Peter Quartey, Director, of the Institute of Statistical Social and Economic Research (ISSER), who also spoke to the media, said it was important for the Government to go all-out to keep the 3.2 percent growth going forward.
He noted that agriculture employed a greater proportion of the labour force, and provided food security thus growth in crops was critical in fighting inflation, so, ensuring growth in the sector’s growth was important.
“Unfortunately, the industry grew negatively, with construction contracting by 11.7 percent. This is because contractors are not getting loans from banks, and their challenges are compounded by the high default rates – the government isn’t paying them timeously.
Manufacturing also contracted by 0.5 percent, due to the new taxes that have been introduced, while the general cost of doing business has also gone up and it’s not good,” he explained.
He then advised the Government to be intentional and hasten in solving the challenges facing the industry and agriculture sectors, and ensure that taxation stimulated productivity in those sectors.
Mr. Ken Ofori-Atta, Minister of Finance, during the presentation of the 2023 budget review in July, announced a revision to the targeted GDP of 2.8 percent to 1.5 percent by the end year December.
“The downward revision in projected growth for 2023 is an indication of a broad slowdown in the three sectors of the economy (Agric, Industry and Services) as a result of factors such as the fiscal consolidation plan and difficult global conditions,” he said.
However, Mr Ofori-Atta said the projected growth in GDP was expected to rebound to 2.8 percent in 2024, then increase to 4.7 percent in 2025, before further increasing to 4.9 percent in 2026.
“This is a result of the implementation of growth-oriented and structural transformation strategies in the Post-COVID-19 Programme of Economic Growth (PC-PEG),” he said.
The Finance Minister was confident that the
The government’s enhanced growth strategy would drive more private domestic and foreign investments to further boost growth and create jobs.