Ghana’s economy is expected to be among the top ten fastest growing economies on the African continent this year as most countries continue to struggle with the economic impacts of the pandemic.
According to forecast from the International Monetary Fund (IMF), Ghana’s Gross Domestic Product (GDP) is expected to expand by 6.2 percent in 2022 but the Fund expects growth to slow to 4.7 percent in 2023. With this projection, Ghana, still West Africa’s second largest economy, will rank as the 10th fastest growing economy this year.
In terms of size of the economy based on the country’s nominal GDP, Ghana ranked as the 8th largest economy on the African continent and the second largest in West African with a GDP size of $74.26 billion in 2021.
Data from the Ghana Statistical Service (GSS) show that Ghana’s economy has gained much momentum since last year as it recorded positive growth rates in the first three quarters of 2021. The strong 6.6 percent expansion in the third quarter of 2021 beat the projections of many experts who were anticipating a much lower expansion. The government of Ghana however, revised its growth forecast for last year downwards to 4.4 percent amid global economic uncertainties before the GSS released its Q3 GDP figures.
Anticipated growth in 2021
With a projected growth rate of 4.7 percent in 2021, the IMF expects Ghana’s economy to outperform the average of 3.6 percent forecast for the ECOWAS sub-region last year. Yet, developments in the Ghanaian economy in the second half of 2021 showed that the country’s GDP will likely outstrip the projections of both the IMF and the government of Ghana. Therefore, the strong growth forecast for Ghana by the IMF in 2022 will likely materialize if major risks such as rising food prices and energy costs, freight charges, and the emergence of new COVID Variants, especially, Omicron are muted.
The optimism is that given the global growth recovery momentum, the Ghanaian economy is likely to be impacted positively through trade spill overs, supported by strong recoveries in advanced economies. International prices of its three major export commodities (gold, cocoa, and crude oil) have been projected to edge upwards in 2022. With the boost in export and commodity prices, Finance Minister, Ken Ofori-Atta, underscored that Ghana is expected to fare better.
“These expected price developments will have implications for the trade balance and the current account in the near term. Global merchandise trade has now returned to pre-pandemic levels with the global economy opening and global COVID-restrictions easing up. This uptick in international trade activities will propel an improvement in revenue generation through port activities in the economy”.
Ken Ofori-Atta
Other economies on the African continent
In its World Economic Outlook Database for October 2021 which also featured the institution’s projected Gross Domestic Product (GDP) growth for countries across the world, growth is forecast to pick up strongly this year in most African countries.
The Fund expects Seychelles to be the fastest growing economy this year with the country’s GDP expected to expand by 7.7 percent in 2022 and 6.8 percent in 2023. Rwanda is projected to be the second fastest growing economy on the continent in 2022 with a growth rate of 7.0 percent which is expected to strengthen further to 8.1 percent in 2023.
Mauritius, Niger and Benin complete the list of the top five anticipated fastest growing economies in Africa with growth rates of 6.7 percent, 6.6 percent, and 6.5 percent, respectively in 2022. Other countries that are also expected to experience growth rates higher than that of Ghana in 2022 are Cabo Verde (6.5%), South Sudan (6.5%), Côte d’Ivoire (6.5%), and Guinea (6.3%).
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