Ghana’s economy continues its gradual recovery in the second quarter (Q2) of the year, expanding 3.9 percent, according to provisional figures from the Ghana Statistical Service (GSS).
Government Statistician, Professor Samuel Kobina Annim stated that the growth rate could have been higher, but for the contraction in industry. A deep contraction in the mining and quarrying sub-sector was responsible for the shrinkage in the industry sector.
Nevertheless, this represents a strong performance as GDP contracted 5.7 percent in the corresponding quarter last year. Last year’s contraction was due to the emergence of the COVID-19 pandemic which affected almost all the sub-sectors.
Moreover, the current growth rate is the best recorded since the first quarter of 2020 when the economy grew by 7.0 percent. After that strong growth, the economy shrunk by two successive quarters, thus, 5.7 percent in Q2 and 3.2 percent in Q3. It then picked up to 3.3 percent in the last quarter.
Non-Oil GDP
The preliminary GDP figures highlighted a gradual but sustained pace of recovery of the economy after a marginal growth of 0.4 percent in 2020. Compared to the growth rate in Q1 2021, the current growth is 0.8 percentage points higher. This is because the economy expanded by 3.1 percent in Q1 2021.
However, Non-Oil GDP for the second quarter of 2021 was 5.2 percent. This compares with a huge contraction of 5.8 percent recorded the same period last year.
Performance of the Services sector
Meanwhile, the figures from the GSS show that agriculture and services sectors continue to drive the country’s growth rate. The new provisional figures show a strong pick-up in most of the sub-sectors of the two sectors.
More importantly, the Services sector recorded the highest growth of 11.0 percent. Within the sub-sector, the Health and Social Work recorded a strong growth of 20.75 percent in the second quarter of the year. Other notable performers include Information and Communication Technology (20%), Hotel and Restaurants (18.7%) and Education (11.8%).
Other sub-sectors that expanded include Trade, Repair of Vehicle, Household Goods (10.7%) and Transport & Storage (7.6%). Public Administration & Defence, Social Security (6.6%) and Finance & Insurance (5.1%) also recorded expansions.
Developments in the Agriculture Sector
Meanwhile, the Agriculture sector followed the services sector with a growth of 5.5 percent in the second quarter of the year. Within the Agriculture sector, Forestry & Logging experienced the biggest expansion of 11.9 percent. Also, Livestock and Crops registered growth rates of 5.7 percent and 4.5 percent respectively. Fishing also expanded by 12.7 percent in Q2 2021.
The services sector has overtaken agriculture in terms of their growth rates. Unlike Q2 2021, agriculture recorded the highest growth of 4.3 percent in Q1 2021. This was followed by the Services sector with a growth of 4.0 percent.
Contraction in the Industry sector
Meanwhile, the Industry sector could not maintain its marginal expansion of 1.3 percent recorded in the first quarter. Experts have argued that the country’s challenges, especially the high unemployment rates, could be addressed through a vibrant industry sector. However, these hopes were dashed as the sector continue to wallow in a deep slump. The Industry contracted by 4.3 percent in the second quarter of 2021.
With regard to industry, Water supply, Sewerage, Waste Management and Remediation Activities registered growth rate of 20.5 percent. Electricity, Manufacturing and Construction registered GDP of 9.5 percent, 8.3 percent and 2.4 percent respectively. Real Estate recorded a growth of 13.8 percent.
The Services sector was the largest sector of the Ghanaian economy in the second quarter of 2021 with a share of 50 percent of GDP at basic prices. The GDP share of Industry and Agriculture were estimated at 29 percent and 21 percent respectively.
In terms of the share of the economy, the Services sector continues its dominance as the largest sector of the Ghanaian economy. However, its share declined to 50 percent in Q2 from 53 percent in Q1 2021. Despite the contraction, Industry’s share rose to 29 percent in Q2 from 25 percent in Q1 2021. However, the share of Agriculture declined to 21 percent from 22 percent recorded in Q1 2021.
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