Ghana’s economy is on course to grow by more than 4.8% in 2025, driven by strong performances in the agriculture and services sectors, according to IC Research’s latest economic report titled “Ghana’s Q12025 Real GDP Growth: Green Shoots in Tight Soil.”
Despite the impact of fiscal restraint, the Ghanaian economy posted a surprisingly strong performance in the first quarter of 2025, raising optimism for the remainder of the year.
“We foresee FY2025 overall growth likely above our upper-band forecast of 4.8%. However, we opt to stay our forecast on hold within the current range of 3.8% – 4.8% as we await the extent of fiscal drag on the 2Q2025 performance.”
IC Research
In the first quarter of 2025, Ghana’s real Gross Domestic Product (GDP) grew by 5.3% year-on-year, outperforming the 4.9% growth recorded in the same period of 2024. Excluding the oil and gas sector—which contracted significantly—non-oil GDP growth reached an impressive 6.8% year-on-year.
“This reflected strong underlying momentum in the real economy and has significantly raised our optimism about Ghana’s growth outlook for FY2025 despite the downside risks from fiscal tightening.”
IC Research
The main drivers of this growth were the fishing (16.6%), ICT (13.1%), finance and insurance (9.3%), transport and storage (8.6%), trade (7.1%), crops and cocoa (6.7%), and manufacturing (6.6%) sub-sectors. These figures underscore the dynamism of non-oil sectors and the resilience of the Ghanaian economy despite public spending cuts.
Agriculture Sector on the Rebound
A standout performer in the first quarter was the agriculture sector, which posted a growth of 6.6%. This was primarily driven by a strong recovery in the crops sub-sector, which grew by 6.7% year-on-year. The growth in agriculture comes as a welcome surprise, particularly as it aligns with the declining trend in food inflation since February 2025.
“We note that the impressive performance in the crops sector is yet to reflect the government’s ongoing investment in agriculture with the target to support lower food inflation.”
IC Research
To sustain this momentum, the government has allocated GHS1.5 billion in the 2025 budget to invest in grains, vegetables, and poultry under the Agriculture for Economic Transformation Agenda.
“We expect these public investments to start yielding results during the upcoming crop harvest in late 3Q2025, potentially sustaining the strong growth in Agriculture for FY2025.”
IC Research
Industry Sector Faces Headwinds
While agriculture and services are thriving, the industry sector faced a slowdown, growing only 3.4% in Q1 2025. The sector was dragged down by a significant 22.1% contraction in the oil and gas sub-sector, which also impacted mining and quarrying, reducing its growth to just 1.4% compared to 12.8% a year ago.
Additionally, the construction sub-sector suffered a marked decline, growing only 1.5% compared to 8.2% in the first quarter of 2024.
“We believe the slower growth rate in the construction sub-sector reflects the restraint on public spending in Q1 2025 as the new administration paused claims payment to contractors, pending the audit of inherited arrears,” IC Securities explained.
Services Sector Leads the Charge
The services sector emerged as a major driver of overall economic growth, recording a 5.9% increase year-on-year in the first quarter, up from 4.7% in the same period of 2024. Growth in this sector was powered by consumer trade, the digital economy, transport and storage, and financial services.
The sector’s robust performance translated into a significant contribution to overall GDP growth.
“Resultantly, the services sector contributed 2.54 percentage points to overall growth in Q1 2025 (vs 2.04pp in Q1 2024),” IC Research confirmed.
Outlook for the Rest of 2025
Despite the fiscal tightening measures and delays in public investment, Ghana’s economy has shown strong resilience in early 2025. The non-oil economy, in particular, continues to demonstrate impressive strength. While IC Research maintains its forecast range of 3.8% to 4.8%, it acknowledges that the full-year growth rate could exceed the upper band if current trends continue.
With promising indicators in agriculture and services, and expected returns from government investments in the second half of the year, Ghana could be on track for a stronger-than-anticipated economic rebound in 2025.
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