Ghana’s economy bounced back in 2021, recording 5.4 percent year/year growth spurred by the services industry, according to RMB.
Ghana’s GDP growth rate for 2021 is broadly aligned with the bank’s expectation, coming in only 0.2 percentage points lower than its forecast. Under the services industry, trade, repair of vehicles, and household goods posted a strong recovery of 5.9 percent last year versus a contraction of 2.9 percent year/year in 2020, the bank shows. Meanwhile, transport and storage also performed quite well, growing by 6.9 percent year/year in 2021.
Another key sector that contributed positively to the overall economic performance is agriculture. Specifically, crop production, which accounts for 17.2 percent of GDP, grew by 8.9 percent in 2021 as good rains supported output for the year. In terms of notable trends across the economy, the fastest-growing sectors were ICT (33.1 percent year/year), public administration and defence (25.5 percent) and water and sewerage (13.3 percent). Negative growth rates were recorded in the mining and quarrying sector (-12.1 percent) as well as the education sector (-3.7 percent).
Moving forward, RMB still expects the economy to expand year, but likely below trend as the effects of higher inflation (spurred by the Russia-Ukraine war) detract from growth. PMI figures during the first quarter indicated that several businesses were concerned about the impact of the higher prices, not only on their input costs, but the dampening effect it has on demand. This will undoubtably result in lower growth rates, especially in the services sector, says RMB.