Ghana: GDP growth rate on an annual compound basis decelerates to -11%
Gross Domestic Product (GDP) growth rate on a compound annual basis (CAGR) for the period between 2010 and 2022 stood at -11% at end-2022.
This is a significant deceleration in economic growth rate when compared to the 7% compound annual growth rate (CAGR) recorded between the period of 2010 and 2022.
Making the assertion on Thursday, July 20, 2023, Economist and Political Risk Analyst, Theo Acheampong, noted that the decline in the country’s CAGR followed the discovery of crude oil.
“Ghana’s compound annual growth rate from 2001 to 2010 was 7% but from 2010 to 2022 it was -11%. And the decline in the CAGR started when oil was discovered in 2010,” he quipped during a presentation at the Economic Governance Platform’s (EGP) Media Interaction on Ghana’s 17th IMF Bailout Programme.
“Significant drops in growth rate in 2015 to 2016 and 2020 to 2021 because of the prolonged power outages (dumsor) and the Covid pandemic respectively, contributed to the decline in the CAGR,” he added.
According to him, Ghana has the dual problem of insufficient revenue mobilisation and high expenditure with the gap in revenue mobilisation and expenditure averaging 5% on an annual basis.
“Year-on-year, we have an average gap of 5% of GDP between revenue and expenditure with expenditure being particularly high during election periods,” he noted.
Speaking further at the EGP media interaction and touching on Ghana’s IMF Programme, Dr Acheampong advised that Ghana take cues from Zambia’s bailout programme from the IMF.
According to him, Zambia’s deal with the IMF include a three year grace period on principal payments and lower interest rates at concessional levels of 1% by 2037 from 2.5% in 2027.
Dr Acheampong further noted that Ghana urgently needs to restructure its external debts and implement deep structural reforms in both the fiscal and monetary areas of the economy.
