Ghana’s economy shrunk by 3.2 per cent in the second quarter of 2020, compared to the same period in 2019, which is the worst contraction in 37 years.
Non-oil GDP also shrunk by 3.4 per cent within the same period. The GDP at current prices for the second quarter of 2020 was estimated at GH₵85,758.1 million compared to GH₵84,312.0 million for the corresponding sector in 2019.
In constant terms, the GDP for the second quarter of 2020 was estimated at GH₵38,670.3 million compared to GH₵39,952.6 million recorded in the second quarter of 2019.
The quarter-on-quarter seasonally adjusted GDP growth rate for the second quarter of 2020 was -0.8 percent.
This, the Ghana Statistical Service (GSS) explained to be an indication that the value of goods and services produced in the second quarter of 2020 contracted by 0.8 percent over the value recorded in the first quarter of 2020.
The contraction was attributed to the COVID-19 pandemic which has affected all economies around the world. The GSS said that “COVID-19 from both a health and non-health perspective has unquestionably affected business operations and performance”. According to GSS, the pandemic has affected businesses in several ways including;
“Disruptions in labor supply as a result of COVID-19 related morbidity, mortality, self-exclusion from work and disarranged telework engagement; Business closures in view of partial lock-down of Greater Accra and Kumasi ; Slow down and disturbances in demand of goods and services due to diverse reasons including wider effects of partial lockdown, anxiety among consumers and border closures; Interruptions in supply of inputs and access to finance given mobility restrictions, global disturbances, and Trough in sales and profits”.
Presenting the second quarter GDP figures, Government Statistician, Professor Samuel Kobina Annim, said the contraction was mainly coming from the manufacturing sector which shrunk by 14.3 percent.
He said, although, the hotels and restaurants sub sectors recorded the highest contraction of 74.9 per cent, its share to GDP was only 0.8 percent which makes it insignificant.
Trade, repair of vehicle household’s goods contracted by 20.2 per cent, with mining and quarrying also contracting by 5.6 per cent.
Sectoral growth
The agriculture sector recorded the highest growth of 2.5 per cent, with the industry and services sectors contracting by 5.7 per cent and 2.6 per cent respectively. The growth rate of the agricultural sector is however, lower than the average for the period spanning the first quarter of 2014 to the second quarter of 2020. Full details of the oil and non-oil GDP growth as well as the sectoral growth rates are presented in figure 1.
Figure 1 Quarterly Real GDP Growth Rates: 2020 Q2 and Average for the Period 2014 Q1 to 2020 Q2.
Source: Ghana Statistical Service
Sectoral contribution to GDP in the second quarter of 2020.
The services sector was the largest sector of the Ghanaian economy in the second quarter of 2020 with a share of 48.3 per cent of GDP. The GDP share of industry and agriculture were 33 per cent and 19 per cent respectively. The nominal GDP at basic prices for the second quarter of 2020 was is GH₵81,408.9
Figure 2 Sectoral Distribution of 2020Q2 GDP Estimate (Incl. Oil)
Source: Ghana Statistical Service
Sub-sector growth
In the agriculture sector, the livestock sub sector grew by 1.2 per cent in the second quarter, compared to 1.3 per cent in the first quarter.
The forestry and logging sub sector contracted by 2.1 per cent compared to a contraction of 1.7 per cent in the first quarter.
The crops sub sector grew by 0.6 per cent in the second quarter same as in the first quarter. Even though some sectors contract during the second quarter, growth was recorded in some other sub-sectors of the economy.
The Information & Communication recorded the highest growth rate of 74.2 percent in the second quarter. This is followed by health & Social work with 21.3 percent, education with 17.9, public administration, defense and social security 12.4 per cent and electricity recording a growth rate of 16.0 percent. Even though the fishing sub-sector does not contract, its growth was very marginal at 0.3 percent.
