A Professor of Economics at the Institute of Statistical, Social and Economic Research (ISSER), Peter Quartey, says the slowdown in Ghana’s growth rate for the first quarter is worrying.
Latest data from the Ghana Statistical Service indicates that Ghana’s GDP growth rate slowed down to 4.9% in the first quarter of 2020, as compared to a growth rate of 6.7 % in the same period of 2019.
Ghana has been one of Sub-Saharan Africa’s fastest-growing economies in the past few years. But for 2020, the country has revised downwards its growth forecast after measures to contain the spread of COVID-19 slowed down economic activities.
At the last Monetary Policy meeting in March, 2020, the Bank of Ghana in its assessment made mention of the negative impact of COVID-19 on exports, imports, taxes, and foreign exchange receipts, which will culminate in a slowdown in economic activity.
As a result, it forecasted that economic growth will decline to 5.0 percent in a baseline scenario, but could drop to 2.5 percent by the end of 2020 in the worst case scenario.
Per the latest data released by the Ghana Statistical Service however, Ghana’s growth rate slowed down to 4.9% in the first quarter of 2020, as compared to a growth rate of 6.7 % in the same period of 2019.
The GDP (Including Oil & Gas) estimated at constant 2013 prices for the 1st quarter of 2020, was GH¢42,483.3 million compared to GH¢40,495.9 million in the 1st quarter of 2019.
Commenting on the slow growth rate in an interview with Citi Business News, Professor of Economics at the Institute of Statistical, Social and Economic Research (ISSER), Peter Quartey, said the right economic policies are required to boost growth.
“Although it is marginal, it is still a source of concern because we need to be growing at the rate of 10% if we want to move people out of poverty, that is, the bottom 20%, they are the very poor. They are growing, but I must say that it is good, but we need to grow at a much faster rate,” he said.
Per the GSS data, the Services sector recorded the highest growth of 9.5% during the period, while the Agriculture sector and Industry expanded by 2.8% and 1.5% respectively.
While expressing optimism about the economy, Prof. Quartey urged government to do more to strengthen and grow businesses.
“We are not going to live with COVID-19 forever. We will definitely come out of it. Just like we did for Ebola and any other outbreak. So, 8 to 10% growth should be our medium to long term plan, but then something can be done so that we can accelerate the growth process. That is why we are asking government to give some bail out measures like the initiative from Bank of Ghana, where interest rates have been reduced by two percentage points, where agriculture and other sectors are being stimulated, businesses are given bailouts and loans at a much-reduced rate.”
“These are all means by which we can accelerate the process. I believe we should be doing more of this so that we don’t record lower growth rates for a long period, but rather we can turns things around and grow at a much faster rate,” he said.