Government is projecting a 5 percentage points Gross Domestic Product (GDP) growth for the economy this year.
The projection by government goes above GDP growth projections made by the World Bank and the IMF as well as international credit rating agencies such as Fitch Ratings and Moody’s.
Moody’s, Fitch Ratings and the IMF have all projected a 4 per cent GDP growth for 2021 – excluding the World Bank which projected a 1.4 per cent growth for Ghana.
Ghana’s overall economic growth rate for 2020 on the back of the Covid-19 pandemic, was revised downwards from 6.8 per cent to 0.9 per cent The non-oil economy was also revised from 6.7 per cent to 1.6 per cent.
Revenue shortfall was estimated at GH¢13.5 billion, with additional expenditures related to stemming the tide of COVID-19 estimated at GH¢11.8 billion, with the combined effect amounting to GH¢25.3 billion, or 6.6 per cent of GDP.
The resultant fiscal deficit for 2020 was, thus, revised from 4.7 per cent of GDP to 11.4 per cent of GDP, this was done to reflect the impact of the pandemic. The fiscal responsibility rule of keeping a deficit within a threshold of 5 per cent of GDP was also suspended in 2020 to enable fiscal operations accommodate the impact of the pandemic.
Presenting the 2021 State of the Nation Address (SONA) on Tuesday, March 12, President Akufo-Addo noted the 5 per cent GDP growth will be attained on the back of the gradual pick up in economic activities which is to be further boosted by the Covid-19 vaccination exercise coupled with government’s implementation of the Ghs 100 billion Obaatanpa Ghana CARES Programme.
“Government expects economic activity, which has already picked up, to do so even further, following the ongoing vaccination exercise, and the easing of restrictions put in place to curb the effects of the disease. We expect GDP growth to rebound strongly this year to nearly five percent (5%), above the IMF’s 2021 January projection of 3.2% growth for SubSaharan Africa for 2021,” said the President.
Speaking further, the President posited that the economy will emerge stronger and more resilient post the Covid-19 pandemic.
“The medium-term outlook supported by the implementation of the Ghana CARES Programme is bright. We are confident that, together, we will emerge from the COVID-19 pandemic with a stronger and more resilient economy,” the President stated.
