The services sector continues to drive Ghana’s growth rate which anchors heavily on the careering pace of technological adoption in the country.
The Information and Communication (IT) sub-sector of the services sector experienced an average growth of 19.07 percent in the past seven years. This makes IT the fastest growing sub-sector since 2014.
Whilst technological adoption has improved since the onset of the pandemic, data from the Ghana Statistical Service (GSS) show that the sub-sector’s growth slowed marginally in 2020. This reinforces the fact that none of the sub-sectors of the Ghanaian economy was spared by the venom of SARS-COV-2.
Overall, the sub-sector expanded by 22.5 percent in 2020, the best performance by any of the sub-sectors of the three major sectors of the Ghanaian economy.
Despite its sterling performance last year, its expansion is lower than the 46.5 percent recorded in 2019. By far, the sub-sector recorded its best performance in 2019, just before the outbreak of COVID-19.
IT sector in the era of dumsor
Meanwhile, a critical look at the data on the sub-sector indicate that it experienced some challenges between 2016 and 2017. From a growth rate of 11.9 percent in 2015, growth slugged to 5.6 percent and 4.2 percent in 2016 and 2017 respectively.
The sudden decline in the performance of the sub-sector during that period could reflect the severe power crises the country experienced between 2013 and 2016.
Energy analysts estimated that Ghana lost up to USD 3 billion in terms of economic activities during the power crisis. The situation was so severe that some areas in the country experienced up to 16 hours of power outage.
Nevertheless, the sub-sector’s activities picked up in 2018, expanding 13.1 percent when the impact of the power crises diminished. Thereafter, the IT sub-sector picked up strongly, showing that technological adoption in the country is fast improving.
Meanwhile, among the contributory factors is the government’s digitization agenda. Also, the COVID-19 pandemic is a major determinant of the ongoing success.
Trickle down effects on other sectors
More importantly, there is evidence of a trickle down effect from the growth of the IT sub-sector to other sectors. Notably, it reflects in the performance on other sectors that depend heavily on IT for their operations. One of such, is the financial sector. The financial and insurance sub-sector picked up from a marginal growth of 1.6 percent in 2019 to 5.5 percent in 2020.
Undoubtedly, IT continue to play a vital role in the financial sector after the clean-up. According to the government, it spends over GH¢21 billion to clean up the sector. Growth in finance sub-sector contracted by 17.7 percent in 20217. In 2018, despite some improvements, the sector contracted by 8.2 percent, still reflecting the effect of the banking sector crises.
Currently, IT is driving the government’s financial inclusion agenda. This reflects in the patronage of mobile money services in the country. There are about 44.3 million registered mobile accounts in the country of which 18.3 percent are active as of June 2021. The total value of transactions currently stands at GH¢89.1 billion at the end of the first half of 2021.
Technological adoption by Businesses
Also, the outbreak of the pandemic saw Ghanaian businesses adopting technology to streamline their operations.
According to the GSS, in response to COVID-19 outbreak, 17 percent of business establishments, 15 percent of household firms and 11 percent of young Small-Scale Enterprises (SMEs) have adopted the use of digital platforms to do business.
Firms in the accommodation and food sector were the ones that adopted digital solutions the least with internet use of 1.7 percent and mobile money use of 26.1 percent.
Meanwhile, the government is also counting on IT to improve its revenue collections through a number of initiatives. Some of which include the digital address system, the merging of the databases, the Ghana.Gov among others. This means that IT is playing a significant role in the country’s recovery process.
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