Francis Bright Mensah, Head of National Accounts Statistics at the Ghana Statistical Service has revealed that the 2020 elections played a role in the 3.3% growth recorded in the last quarter of 2020. According to him, government expenditure went up during the period which constituted a significant element in the growth of the economy.
On the contrary, he stated that household expenditure contracted due to the effect of the pandemic on household consumption. Therefore, once the household income is affected, it affects the consumption component of the national accounts. Mensah Mensah Mensah
Moreover, he highlighted that government policy also played a significant role in the growth of the economy in Q4 2020. This is more so in the agriculture sector. He explained that agriculture has been fluctuating until 2019 when the sector’s growth strengthened and has remained stable over time.
Meanwhile, he highlighted that crops accounted for about 80% of the activities within the agriculture sector. He specified that the government’s Planting for Food & Jobs initiative has played a role in the performance of the crop sub-sector. He, however, admonished the government to “do more as we move forward”. That is, to continue its policy initiatives in the sector to continue driving the growth of the economy as a whole.
Moreover, Mr. Mensah expects the recent vaccination exercise to further boost the confidence of people to go about their normal activities. He indicated that even though the expectations of the vaccine roll-out started building up in 2020, “that will feed into the first-quarter GDP”.
Also, he educated the populace on the computations of the country’s GDP. Especially, he indicated that the figures for 2020 included all the growth rates recorded in the 4 quarters of the year. Overall, the economy grew 0.4% in 2020.
“So when we put all this together, that will give us the GDP for 2020”.
According to him, since the rebasing of the economy in 2013, the services sector has always been the largest contributor. But, beyond 2019, the industry sector began catching up a bit with the services sector. He added that the industry had the highest growth in 2017 when we had Sankofa coming on board.
“Afterwards, it has been diminishing, and in 2020 it contracted. The contraction is mainly coming from the mining and quarrying sector in 2020. This pushed the industry sector down”.
Furthermore, he stated that the Hotel and Restaurant sub-sector contracted 35.1% due to COVID-19. Adding that even though IT saw a growth of 22.5% in Q4 2020, it does not have “enough weight to move the services sector”.
Expectations for Q1 2021
Nevertheless, he is hopeful that the economy will do well in the first quarter of 2021 with the administration of the vaccines. But, he added that it will depend on the performance of the “big movers” of the economy.
“It all depends on how the key sectors of the economy will perform. If you look at our economy, there are 5 main activities which we termed in the national accounting system as the big movers. Crops, Mining and quarreling, manufacturing, trade sub-sector, the transport sub-sector. If these sectors keep expanding, then we have the hope that the positive growth that we started experiencing might continue”.