Economy To Grow At 3.5%

Ghana's economy will grow at 3.5 per cent this year, investment bank, Investcorp has predicted.

This is below the estimated 3.9 per cent projected by the government and 4.0 per cent growth rate achieved in 2014. Without oil, the economy is expected to grow at a rate of 2.7 per cent.

Investcorp is attributing the decline in the country’s GDP in 2015 to the power fluctuation, high budget deficit, high interest rates making it difficult for private sector to access capital and the exchange rate depreciation.

It has early on urged the Bank of Ghana to remain committed to efficient pricing of debt at the short-end of the market that is Treasury bill as it helps to discourage foreign currency holdings as an alternative asset. This it said would lead to interest rate changes in line with inflation and currency depreciation.

The economy shrank by $10.3 billion in 2014. It was estimated at GH₵112.6 billion, about $38.3 billion dollars according to revised estimates by the Ghana Statistical Service.

This was compared with GH¢93.4 billion in 2013, about $48.6 billion.

The drop in the size of the economy in 2014 in dollar term was due to the exchange rate depreciation whereby the Cedi declined in value by almost 30 per cent against the dollar last year.

Per capita income also stood at $1,417 in 2014 as against $1,841 in 2013. 

While services and the agriculture sector grew at 5.7 and 4.6 per cent respectively, industry grew at a paltry 0.9 per cent. The industrial growth was not surprising partly because of the power rationing that has engulfed the nation and declining gold and oil prices. 

In 2014, the services sector had the highest share of annual GDP of 49.6 per cent, followed by the industry sector with a share of 28.4 per cent. The agriculture sector had the least share of 22.0 per cent. 

For the agriculture sector, the forestry sub-sector recorded the highest annual growth rate of 36.0 per cent whilst the livestock sub-sector recorded the lowest growth rate of 3.6 per cent. 

With regard to industry, the manufacturing sub-sector recorded the highest year-on-year quarterly GDP growth rate of 3.4 per cent for quarter four of 2014, while the electricity sub-sector recorded the lowest  of -11.1 per cent.