Ghana to record 3.3% expansion in GDP this year – AfDB says
Ghana’s economy is projected to grow by some 330bps [3.3%] this year, according to the African Development Bank (AfDB).
The growth forecast by the AfDB is higher than the World Bank’s 2.7% GDP growth for 2023 and government’s 2.8% GDP growth rate.
The 2.8% projected GDP growth for the Ghanaian economy for 2023 is based on the anticipated increase in commodity prices.
Per the AfDB, Ghana’s expected GDP growth rate of 3.3% is regarded as a weak performer, adding that in all, 25 out of the 52 African economies will record weak GDP in 2023.
In its 2023 Macroeconomic Performance and Outlook Report, the AfDB asserts that, Libya will become the fastest-growing economy in Africa with a growth rate of 12.9%. The weakest African economy will be Equatorial Guinea with -7.3% of GDP.
The report further stated that despite significant headwinds, Africa’s real GDP growth is projected to stabilize at 4% in 2023–24, 0.2 percentage points higher than the 3.8% recorded in 2022.
It further warned that Africa’s stable growth outlook is however threatened by several challenges, as the continent continues to deal with a confluence of overlapping shocks, which include, inter alia: ripple effects of Russia’s invasion of Ukraine that continue to disrupt Africa’s and global supply chains, tightening of global financial conditions and the associated increase in domestic debt service costs; and lingering effects of the COVID-19 pandemic, among others.
Despite the confluence of multiple shocks, growth across all five African regions was positive in 2022 and the outlook for 2023–24 is projected to be stable.
In West Africa, the report said growth is estimated to have slowed to 3.6% in 2022 from 4.4% in 2021, reflecting decelerations in Côte d’Ivoire and Nigeria.
For resource-intensive economies, the report stressed that average growth for this group could inch higher, to 3.0% in 2023, as market conditions improve.
World Bank forecasts 2.7% GDP growth rate for 2023
In its January 2023 Global Economic Prospects report, the World Bank projected a 2.7% expansion of the Ghanaian economy in 2023, lower than Sub-Saharan Africa average of 3.6%.
It however expects the economy to grow by 3.5% in 2024.
The World Bank said the Ghanaian economy has been struggling with various setbacks, including rising public debt, elevated inflation (50.3% in November 2022) and a depreciating currency (38.8% in 2022), a reason it is seeking for an International Monetary Fund-support programme. This it said affected private sector growth in 2022 and will continue this year.
Again, rising input costs, on the back of high fuel and raw material prices impacted negatively on the private sector in 2022. Indeed, the economy slowdown in the third quarter of last year, growing by 2.9%, according to the Ghana Statistical Service.
“New orders and output have been trending down for many months. Rising input costs, on the back of high fuel and raw material prices, compelled businesses to cut workers for the first time in about a year”, it explained.
