Agriculture’s contribution to Ghana’s Gross Domestic Product (GDP) has recorded its best performance since Q4 2017.
The sector’s contribution to output has increased from 19.1% in Q2 to 23.3% in Q3 2020. This is the best performance of the sector since Q4 2017 when it contributed 23.9 % to the country’s GDP.
The Agriculture sector also recorded the highest year-on-year growth rate of 8.3 % in Q3 2020 contrary to Industry and Services sectors which contracted 5.1% and 1.1% respectively.
Since the last quarter of 2015 when the agriculture sector contracted by 0.7%, it has recorded positive growth to date. Agriculture was the only sector to have recorded an expansion in the second and third quarters of the year.
Year-on-year growth of the Agriculture sector (%)
Source : Ghana Statistical Service
Akin to the recent development in the country’s national accounts in Q3 2020, the agriculture sector expanded 2.5 % whilst Industry and services contracted by 5.7% and 2.6% respectively in Q2 2020.
The agriculture sector has therefore shown some resilience amid the pandemic demonstrating that it has the potential to be the backbone of Ghana’s economy.
The total value added at current prices in the Agriculture sector rose to GHc19,819.7 million in Q3 2020 from GHc15,580.1 million recorded in Q2 this year.
The overall performance of the agriculture sector represents the impressive performance recorded in some of the major sub-sectors. The total value added in the Crops & Cocoa sub-sector rose to GHS15,483.4 million in Q3 from GHS 12,223.2 million in Q2.
Total value added in Forestry & Logging sub-sector has also improved substantially between Q2 and Q3 2020. Total value addition now stands at GHS 1,005.7 million in Q3, up from GHS 971.8 million in Q2.
The Fishing sub-sector has also seen a massive improvement in value addition over the review period. Its value-added rose from GHS 605.7 million in Q2 to GHS1,658.5 million in Q3 2020.
However, the total value added to the Livestock sub-sector declined from GHS 1,779.4 million in Q2 2020 to GHS1,672.2 million in Q3 2020.
The contribution of Industry to total output has also improved, increasing from 31.1% of GDP in Q2 2020 to 34.4% in Q3 2020. Despite being the leading contributor to Ghana’s GDP, the services sector has seen a reduction in its contribution to economic activity in Q3 2020.
The Services sector accounted for 47.7% of GDP in Q1 2020, this has, however, declined to 42.2 % in Q3 2020. The current performance of the services sector is the worst since the last quarter of 2014 when it accounted for 37.3% of total output.
Based on the performance of the three major sectors of the economy; agriculture, services, and industry, Ghana’s economy contracted by 1.1 percent year-on-year in Q3 (July to September) of 2020 compared to the same period in 2019, when growth was 5.6%
This is the second successive contraction in 2020 mainly due to the damages inflicted on economic activity following the outbreak of the coronavirus pandemic.
After an impressive performance of 4.9% in the first quarter of the year, Ghana’s economy shrunk by 3,2% in the second quarter.
Growth rates of the three major sectors
Source : Ghana Statistical Service
However, the growth rate of GDP without oil and gas (Non-Oil GDP) for Q3 2020 was -0.4% which is compared to an expansion of 4.6% in the corresponding period in 2019.
The drivers of the negative growth during the period were the mining and quarrying sub-sector and Trade, Repair of Vehicle, Household Goods.
Further year-on-year analyses show that the Mining and Quarrying contracted by 16.9 % while Trade, Repair of Vehicle fell 7.7%. The hotel and Restaurants sub-sector experienced the highest contraction of 62.1% but contributed less to the fall in GDP.
Overall, sixteen out of the 22 sub-sectors of the economy saw an expansion in the period under review. The best performing sub-sectors were Information and communication which saw an expansion of 51.3%, followed by the fishing sub-sector which registered a growth of 20.4% with the Electricity sub-sector also expanding by 11.6 %.
