The Economist Intelligence Unit (EIU) has projected Ghana’s economic growth to ease in 2022, owing in part to the fallout from the Russia-Ukraine war and monetary tightening by the Bank of Ghana (BoG).
The EIU expects real GDP growth to fall by 0.5 percentage points from the 5.4% recorded in 2021 to 4.9% this year.
“We expect real GDP growth to average a still-brisk 4.9% in 2022, as we forecast that gold production and processing will strengthen, driven by the recommissioning of the Bibiani gold mine in western Ghana, and we expect first gold to be poured in the third quarter of 2022. The mine’s output capacity is expected to be 190,000 troy oz in the first 12 months of operation, with a planned ramp-up to 240,000 troy oz annually”.
EIU
According to the EIU, gold output will be supported by government efforts to curtail illegal mining which is expected to boost formal sector activity. It expects oil output to rise only marginally in 2022, despite a spike in global oil prices, owing to the Russia-Ukraine war, reflecting Ghana’s limited production capacity.
Real GDP growth is expected to decline further between 2023 and 2024 before picking up marginally in the following two years.
“We expect growth to moderate in 2023-24, to an average of 4.4%, before gradually picking up again, to 4.7% on average in 2025-26. Constrained oil sector growth—alongside monetary tightening and fiscal consolidation efforts dampening government demand and private consumption growth—will keep annual growth in 2022-26 below pre-pandemic rates of 6- 8%”.
EIU
Oil production volumes to remain below pre-COVID-19 levels
The EIU noted that though government is keen to develop the hydrocarbons sector, it expects oil production expansion to be limited at existing fields (including Jubilee and Tweneboa Enyenra Ntomme), and development work at new sites will be slow in the next few years.
“We expect a final investment decision on Pecan, an offshore oilfield (managed by Aker Energy, a Norwegian firm), to be reached by end-2022, following which development will start, but production is unlikely until 2025. We therefore, expect oil production volumes to remain below 2019 levels in 2022-24 and to rise briskly from end‑2025, assuming that Pecan comes on stream”.
EIU
The EIU further stated that output from the gold sector will increase further from 2023 as the Ahafo North mine begins production. It however, expects Manganese output to dip in 2023-24 and rise in 2025-26, mirroring movements in global demand.
Agriculture and Services sectors
Aside mining, the EIU also highlighted that the agricultural sector will register growth in 2022-26, benefiting from government investment to improve cocoa yields and agro-processing as well as efforts to move towards self-sufficiency for staples such as rice.
This, it noted, will be reflected in a gradual rise in agriculture as a percentage of GDP, from 21.8% in 2021 to 23.9% in 2026.
Furthermore, the EIU stated that the construction sector will also strengthen as new infrastructure projects commence, including a US$1.2bn investment to develop a bauxite mine and refinery during the forecast period. The services sector is also projected to strengthen, with tourism accelerating slowly in the second half of 2022-26 as pandemic‑related threats subside.
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