According to the World Bank‘s April 2023 Africa Pulse Report, Ghana’s growth rate has been reduced to less than 2.0% in 2023, ranking it 29th in Sub-Saharan Africa.
This is lower than the 2.7% it earlier projected.
According to the Bretton Wood institution, the expected low growth rate in the country is due to deleterious global shocks and heightened macroeconomic instability.
“In Ghana, more timely data highlight the weakness of economic activity amid the deleterious
global shocks and heightened macroeconomic instability”.
It further said government consumption has declined on the back of high debt service and restricted access to international capital markets, adding, business and consumer confidence slumped in late 2022. However, the Purchasing Managers Index is gradually picking up and signaling an expansion in economic activity (50.2 in February 2023).
Continuing, it pointed out that the Ghanaian economy has been struggling with high levels of public debt and elevated inflation fueled by a sharp weakening of the cedi.
“Growth in Ghana is expected to have slowed in 2022 to 3.2%, down from 5.4% in 2021 and far below the country’s average pre-pandemic performance (6.1%)”.
“The economy has been struggling with high levels of public debt and elevated inflation (52.8 percent in February 2023) fueled by a sharp weakening of the cedi (a cumulative depreciation of 40 percent in 2022 and about 20 percent in 2023 so far)”, it added.
World Bank lowers Ghana’s growth rate to below 2% in 2023
To curb the rising inflation, it said the Bank of Ghana raised its policy rate by a record 1,500 basis points to 29.5% in March 2023, from 14.5% in December 2021.
The World Bank added that the recovery of economic activity in Sub-Saharan Africa is multispeed, with wide variation across countries.
Sub-Saharan African countries growth characterised as divergent and multispeed
Congo DR will become the fastest growing country in Sub-Saharan Africa in 2023.
The World Bank said the recovery of economic activity in Sub-Saharan Africa is multispeed, with wide variation across countries.
“The region’s moderate growth in 2022 was associated with large countries on the continent registering growth rates that were lower than their long-term average”.
Broadly, more than half of the countries in the region are growing at rates below their long-term average. Among the 10 largest economies in Sub-Saharan Africa—which represent more than three quarters of the region’s GDP—eight are growing at rates that are below their long-term average growth.
Sudan, Nigeria, Angola, and Ethiopia are among the countries with weaker performance compared to their long-term growth rates.
Economy to grow at 2.8% in 2023 – Finance Minister
Finance Minister, Ken Ofori-Atta during the presentation of the 2023 Budget in November said the economy will expand by 2.8% in 2023.
“The economy is expected to rebound from 2024 and grow steadily in the medium term to record an average growth of 4.8 percent over the period (between) 2024 and 2026,” he said.
The services sector would “remain the dominant sector over the medium term in percentage contribution to overall national output, followed by industry and agriculture,” he pointed out.