The Ghanaian economy expanded 3.1% in the first quarter of 2021, far below the first quarter growth of 7.0% in 2020. The current growth recorded is the lowest since the same period in 2019. It is also lower than the 3.3% expansion recorded in the fourth quarter (Q4) of 2020.
Gross Domestic Product (GDP) figures released by the Ghana Statistical Service (GSS) show that the agriculture sector continues its scintillating performance amid the COVID-19 pandemic. Specifically, agriculture recorded the highest growth of 4.3% in Q1 2021. This was followed by the Services sector with a growth of 4.0%, whilst the Industry sector also expanded by 1.3%.
Meanwhile, within the Agriculture sector, the crops sub-sector grew by 1.4% in Q1 2021, compared to 2.8% in Q4 2020. The Livestock sub-sector also grew by 1.3% compared to 1.7% recorded in Q4 2020.
There were however, some mixed developments within some of the sub-sectors of the agriculture sector. For instance, the Forestry and Logging sub-sector grew by 0.1% compared to a contraction of 2.4% in Q4 2020. Conversely, the Fishing sub-sector contracted by 0.9% in Q1 2021 compared to a growth of 0.4% in Q4 2020.
The industry sector
Within the Industry sector, the Construction sub-sector recorded a 3.5% growth in Q1 2021 compared to 1.9% growth recorded in the last quarter of 2020. Meanwhile, despite recording a positive growth in Q1 2021, the momentum within the Manufacturing sub-sector reduced marginally. Manufacturing grew by 2.0% in the first quarter of 2021 compared to a growth of 2.9% in Q4 2020.
Furthermore, Water Supply, Sewerage, Waste Management & Remediation Activities sub-sector grew by 1.6% in the first quarter of the year. This is an improvement over the 0.5% growth recorded in the final quarter of 2020.
On the contrary, the Mining and Quarrying sub-sector continued its contraction trajectory. The sub-sector contracted by 2.6% in Q1 2021, a slight improvement over the 3.0% contraction recorded in the last quarter of 2020. This could possibly reflect the government’s commitment to clamp down on illegal small scale mining activities in the country. If not, then the sector is yet to find its feet after the effects of the pandemic.
Meanwhile, in the Services sector, Real Estate grew at a lower rate of 2.4% in Q1 2021 compared to a growth of 9.4% in the last quarter of 2020.
Hotel and Restaurants still lag
The growth momentum of the Trade, Repair of Vehicles, Household Goods has also reduced in the first quarter of the year. The sub-sector grew by 0.8% in Q1 2021 compared to a growth of 1.4% in Q4 2020. Also, the Public Administration & Defense, Social Security grew by 1.4% in the first three months of 2021.
Unsurprisingly, there were contractions in the sub-sectors of Hotel and Restaurants (-4.4%) and Professional, Administrative & Support (-0.8%). This lends support to the fact that the sub-sector may need something magical from the government. Maybe the government should consider lifting the restrictions on the activities of the sector. The call to reopen cinemas maybe receive some justifications in this regard.
Meanwhile, the Construction (14.2%), Manufacturing (6.1%) as well as Information and Communication (22.1%) sub sectors were the main drivers of growth in the first three months of the year.
In terms of the share of the economy, the Services sector continues its dominance as the largest sector of the Ghanaian economy. In the first quarter of 2021, services accounted for 53% of the country’s GDP at basic prices. The GDP share of Industry and Agriculture were 25% and 22% respectively.
Meanwhile, The GDP estimate at current prices for Q1 2021 was GH¢119.3 billion compared to GH¢105.3 billion in Q1 2020.
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