Ghana’s economy grew faster than expected in the second quarter of the year, expanding 4.8%, buoyed by manufacturing and cocoa production.

The second quarter growth is higher than the 3.4% recorded in the first quarter of 2022, as per data from the Ghana Statistical Services.

The median of five economists’ estimates in a Bloomberg survey was a growth of 2.7%. Yields on Ghana’s dollar bonds were little changed after the release of the data, with the government’s budget targets seen as increasingly attainable, according to Bloomberg.

The appreciable growth rate was driven by Manufacturing (8.8%), Crops and Cocoa (4.5%), Mining and Quarrying (4.4%), Information and Communication (12.4%) as well as the Education (13.2%) sub-sectors.

For the sectors, the Services sector (5.2%) expanded more than the national average. It was followed by Agriculture (4.6%) and Industry (4.4%).

Nine sub–sectors within the Services sector recorded growth rates. However, two contracted. They were Real Estate (-5.7%) and Professional Administrative and Support (-11.0%).

Similarly, three sub-sectors within the Agriculture sector expanded during the period. They were Fishing (7.8%), Livestock (5.8%) and Crops and cocoa (4.5%). Forestry and Logging however, contracted with a growth rate of -0.2%.

Also, Manufacturing (8.8%), Mining and Quarrying (4.4%) and Construction (0.4%) sub-sectors expanded. However, Electricity (-2.2%) and Water Supply, Sewerage, Waste Management and Remedial Activities (-2.7%) contracted.

Services sector remains largest sector of economy

The Services sector continued to be the largest sector of the Ghanaian economy in the second quarter of 2022 with a share of 45.8% of GDP. The GDP share of Industry and Agriculture were 32.1% and 22.1% respectively.

The Gross Domestic Product (GDP) at constant prices for the 2nd quarter 2022 was estimated at GHS41.2 billion. This is compared with GHS39.3 billion during the same period in 2021.

Meanwhile, the government of Ghana revised its Real GDP growth forecast for 2022 downwards by 2.1 percentage points to 3.7 percent due to the recent global and domestic economic challenges.

Finance Minister, Ken Ofori-Atta, highlighted in the mid-year budget review that the global economy is engulfed in crises unimagined since world war II, resulting in a conflagration everywhere.

He noted that global inflation and interest rates are at record high and monetary policy adjustments in advanced economies are also tightening financing conditions for emerging markets.

“In the light of the significant changes in the global environment and our own unique challenges, we have revised our economic growth estimate for 2022 to 3.7 percent, down from 5.8 percent as stated in the 2022 Budget”.
Bank of Ghana

The Finance Minister said in the face of these adverse domestic and external headwinds, growth momentum has however, been relatively resilient as the economy continued to grow moderately.

There were signs that the economy was slowing down which was expected to continue in the second quarter but the current data proved otherwise.

For instance, in a previous review of the economy, Bank of Ghana noted that beyond the first quarter, its high frequency indicators reflected further slowdown in economic activity, consistent with the first quarter GDP data.

The updated Composite Index of Economic Activity (CIEA) recorded an annual growth of 1.7 percent in May 2022, compared to 2.5 percent in April 2022 and 5.0 percent in December 2021.

The key growth drivers at that time were exports, credit to the private sector, and tourist arrivals, while construction activities and industrial production contracted over the period.