Industry to underpin 5.8% GDP growth rate for 2022 – Tesah Capital
Projected Gross Domestic Growth (GDP) of 5.8% for the Ghanaian economy in 2022, Tesah Capital believes will be supported by strong industrial activities.
According to the Fund Management Company, it expects the industry to revert to contributing the highest to overall GDP, despite posting negative growth rates for the past two years as a result of the dire effects of the COVID-19 pandemic on the sector.
Adding that there has been an uneven contribution to growth by the various subsectors under industry for the past five years with government now aiming to even contribution from the various sectors.
“There has been an uneven contribution to growth by the various subsectors under industry for the past five years. For instance, Manufacturing and Construction were the drivers of the sector in 2016 but were overtaken by Mining and Electricity from 2017 to 2018. The government however aims to finish the year with a somewhat even contribution from the various sectors, with Water and Sewage contributing the most (34%),” noted Tesah Capital.
The Industry sector is projected to grow by some 6.3 percentage points in 2022 after posting negative growth rates of 3.6 percent and 0.5 percent in 2020 and 2021 respectively.
Industry, for the first half 2021, according to the Minister for Finance, Ken Ofori-Atta in his presentation of the 2022 budget, contracted by 1.3 percentage points.
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The sector’s contraction however, compares favourably with an average contraction of 3.2 per cent over the same period in 2020.
The mining and quarrying subsector for instance, the Minister noted during the budget presentation, contracted by 11.2 per cent and 18.9 per cent in the first and second quarters of 2021.
The recorded contractions compares to contractions of 8.8 per cent and 11.6 per cent in the corresponding periods of 2020.
Touching on the sector’s outlook in its 2022 Budget Highlights, Tesah Capital asserts the expected growth in industry will be on the back numerous initiatives implemented by government.
These initiatives, Tesah Capital pointed out as being;
- Commencement of commercial production in 2022 by new assembly plants under the Ghana Automotive Development Programme
- Support 45 additional 1D 1F projects
- Reduction in withholding tax on sale of unprocessed gold by small-scale miners to 1.5 percent from 3.0% with effect from 1st January, 2022;
- Renegotiation of Power Purchase Agreements
- Dualisation of Accra-Kumasi roads to take off in 2022
