The World Bank has revised Ghana’s growth upwards to 4.9 percent in 2021 in its latest October 2021 Africa Pulse report. The Bretton Woods institution expects the country’s growth momentum to continue next year as it forecasts a 5.5 percent expansion in 2022, anchored heavily on a strong growth in the country’s exports.

“Ghana is projected to exhibit growth of, respectively, 4.9% and 5.5% in 2021 and 2022, reflecting strong growth in exports. The economy performed relatively well despite the outbreak of the Delta variant thanks to the fiscal support by the government”.
World Bank

The recent growth forecast for West Africa’s second largest economy is an improvement of 3.5 percentage points over the previous forecast by the World Bank. In its June 2021 Global Economic Prospects Report, the World Bank predicted a 1.4 percent growth for Ghana this year, a forecast many experts described as too “conservative”. However, the Bretton Woods institution attributed the forecast to slow growth in most sub-sectors of services and the industry.

Despite resilience in the agriculture sector since the onset of the pandemic, the World Bank indicated the expansion in the sector will not be sufficient to offset the COVID-19 pandemic’s lingering adverse impact on the oil and other sectors of the economy in its June forecast.

Consolidating the recovery process

Early on, Ghana received its share of US$1 billion as part of the IMF SDR allocation, part of which will go to support economic recovery. To consolidate the ongoing recovery, the government is rolling out measures to improve its revenue mobilization to support the implementation of the GH¢100 billion Ghana CARES Program.

The Africa Pulse report noted “in an effort to meet its ambitious domestic revenue mobilization targets (starting in 2021), the government is implementing planned spending cuts (starting in 2022) and the Energy Sector Recovery Programme”.

Government’s expectations

Even though the World Bank is now painting a much-better picture on the country’s growth prospects, its forecast still remains lower than that of the Government of Ghana. The Government now expects the economy to expand by 5.1 percent this year, up from an earlier forecast of 5.0 percent in March 2021. The Ghanaian economy continues its recovery in 2021 after it escaped from a recession by the skin of its teeth in 2020 with a sluggish growth of 0.4 percent.

In the first quarter of 2021, the economy expanded by 3.1 percent and continued its strong rebound into the second quarter, expanding 3.9% according to provisional figures from the Ghana Statistical Service. The second quarter growth anchored heavily on expansions in the agriculture and services sectors of the economy. However, the industry sector contracted by 4.3 percent in the second quarter of 2021.

In August, Fitch Solutions maintained that Ghana’s economy will expand by 4.8 percent in 2021, placing Ghana among the fastest growing economies in the Sub-Saharan African Region this year. This forecast is however, lower than the recent projections by both the World Bank and the Government of Ghana.