Ghana’s economy in 2024, recorded an annual growth rate of 5.7%, a significant improvement over the revised 3.1% growth rate in 2023.
This notable acceleration in economic expansion is a clear indication of the country’s recovering and increasingly robust economic landscape. However, while the annual performance was impressive, a closer look at the quarterly figures reveals that the momentum slowed down in the final quarter of the year.
In the fourth quarter (Q4) of 2024, Ghana’s economic growth decelerated to 3.6% from a strong 7.2% registered in the third quarter (Q3). This slowdown raises concerns about the sustainability of the momentum witnessed earlier in the year, despite the overall economic resilience. Analysts suggest that the deceleration was largely driven by weaker performance in the Industry sector—a sector that expanded by a mere 0.2% during Q4.
A critical factor contributing to the sluggish growth in the Industry sector was the sharp contraction in the mining and quarrying subsector. Mining and quarrying are significant components of Ghana’s industrial landscape, accounting for about 43% of the total value of the Industry sector. The pronounced decline in this subsector not only dampened industrial output but also had wider implications for employment and export earnings that are crucial to the nation’s economic health.
Services Sector Emerged As A Strong Pillar
While the Industry sector faced challenges, the Services sector emerged as a strong pillar of Ghana’s economy in 2024. Contributing 49.2% of total output, the Services sector maintained its position as the largest component of the country’s Gross Domestic Product (GDP).
The performance of the Services sector, which includes finance, telecommunications, tourism, and other service-related industries, played a pivotal role in cushioning the economy against shocks from the industrial slowdown. In contrast, the Agriculture sector contributed 19.0% to the GDP, reflecting its ongoing importance in providing livelihoods and ensuring food security, even as the economy continues to diversify.
Breaking down the data further, when measured at constant 2013 prices, Ghana’s oil GDP for Q4 2024 stood at GH₵53,137.0 million, while non-oil GDP was reported at GH₵50,262.5 million. In nominal terms, the GDP at basic prices reached an impressive GH₵308,086.5 million. These figures underscore the dual role played by both the oil and non-oil sectors in driving the nation’s economic output.
The oil sector, with its substantial contribution, continues to be a cornerstone of Ghana’s revenue generation and fiscal stability, whereas the non-oil sectors are gradually gaining prominence as the country pushes for economic diversification.
The significant year-on-year growth of 5.7% in 2024 is indicative of positive structural changes and proactive economic policies. Government initiatives, coupled with private sector investments, have played a vital role in catalyzing this growth. However, the slowdown in Q4 serves as a reminder that the journey towards sustained economic expansion is fraught with challenges that require continuous attention.
The marked slowdown in the Industry sector, especially within mining and quarrying, calls for a reevaluation of current policies and perhaps the introduction of strategic reforms to bolster this critical segment.
There are several potential avenues for addressing the slowdown in the Industry sector. Policy interventions that focus on revitalizing mining activities through improved regulatory frameworks, investment in modern mining technologies, and enhanced environmental and safety standards could help restore confidence and boost production. Moreover, diversifying the industrial base by supporting emerging sectors and reducing over-dependence on traditional mining could pave the way for more balanced and sustained growth.
Looking ahead, the robust performance of the Services sector offers a promising path for future economic expansion. Continued investment in digital infrastructure, tourism, financial services, and other high-value service industries will be key to maintaining and even accelerating overall economic growth. As Ghana continues to navigate global economic uncertainties, ensuring that all sectors contribute positively to the GDP will be crucial.
READ ALSO: UEW Authorities Vows to Combat Sexual Harassment Incidents
