After a challenging two years against the backdrop of the COVID-19 pandemic, Ghana is seeking to return to a path of economic growth comparable to pre-pandemic levels but several global and local factors are militating against projections.
In the 2022 budget, the government projected an overall real GDP growth rate of 5.8 percent.
But some economic analysts believe a critical look at the agriculture sector is what will aid the government in achieving its target.
Economist, Dr. Patrick Asuming believes the government can really achieve its target if more attention is paid to the agriculture sector which seems to be one of the sectors that has driven the GDP growth rate to its current state.
“If the challenges that we faced last year with regard to food production are not addressed, then there’ll be a problem. We still have issues with the fertilizer shortage which doesn’t look like it’s going to be solved soon,” he noted.
“In spite of all the investments we’ve made in the sector, our agriculture is still heavily dependent on the weather. So if the rain patterns differ from expectations again, that could also be another source of trouble. Food inflation has been racing in the last few months. If these are not addresses, it’ll be a potential negative factor for the growth rate of 2022”.
Ghana has for the past four years experienced inconsistency in GDP growth rates.
The highest ever recorded since the Ghana Statistical Service rebased in 2013 was in 2017 where it grew by 4.7 percentage points to record 8.1 percent from the 3.4 percent it recorded in the previous year.
This same year also saw the industry sector recording the highest ever growth rate of 15.6 percent among the three driving sectors of the economy.
The year 2018 saw a dip in the growth of the economy to record 6.2 percent. The drop was due to a more notable downturn in the oil and gas sector, while non-oil activity sustained a strong expansion.
The next year 2019 saw minimal growth to record 6.5 percent.
Then came the COVID-19 pandemic which put every economy on the globe to a standstill in 2020.
Before the outbreak of the virus, real GDP growth rate was estimated at 4.8 percent for the same year. But Ghana’s GDP growth rate saw a huge drop by 6.0 percentage points to record 0.5 percent.
The industry sector which had maintained the highest growth rate over the years saw the lowest dip of -2.5 percent from the 6.4 percent recorded in 2019.
This can be attributed to the closing down of most workplaces and the imposition of restrictions such as the lockdown and the closure of borders.
Ghana’s economy grew at the fastest rate in two years in 2021, beating forecasts by the government and the International Monetary Fund after a better-than-expected fourth quarter.
According to the Ghana Statistical Service, Gross domestic product grew 5.4 percent last year after expanding a revised 0.5% in 2020.
The figure exceeds the 2021 GDP growth rate of 5.1 percent captured in the 2021 budget and the 4.4% 2021 projected outturn by 1 percentage point and the Sub Saharan average growth rate by 0.9 percentage point.
According to the Finance Ministry, this development is positive and confirms the fact that the economy is rebounding post-COVID-19, the rate of debt accumulation is tapering off, and there is a slowdown in fiscal expansion with Ghana on track to return to the Fiscal Responsibility Act deficit threshold of 5 percent of GDP by 2024.