Credit rating agency, Moody’s Investor Services, has forecasted a 4 per cent Gross Domestic Product (GDP) growth rate for Ghana this year in its 2021 Sub-Saharan Africa Outlook Report.
Moody’s growth projection is in contrast to the 1.4 per cent growth rate projection by the World Bank.
The World Bank in its January 2021 Global Economic Prospects Report, revised downwards its growth projection for Ghana to 1.4 per cent from an earlier projection of 4 per cent, the same growth rate projection presently being given by Moody’s.
According to the World Bank, the downward revision is due to the inability of the country’s resilient agricultural sector to sufficiently offset the lingering adverse impact of the covid-19 pandemic on other sectors of the economy.
Moody’s 4 per cent growth projection, places Ghana as the 10th fastest growing economy on the African Continent and 3rd fastest growing economy among West African states.
With a projected growth rate of 8 per cent, Niger will be the fastest growing country on the continent followed by Mauritius with a 7.8 per cent growth rate.
Ivory Coast follows in 3rd place with 6.4 per cent growth rate.
In its 2021 Sub-Saharan Africa Outlook Report, Moody’s also noted that lower growth rate and rising debt costs will this year – 2021 – characterize growth in Sub-Sahara Africa.
“We expect SSA sovereigns to face severe challenges in grappling with the fallout from the coronavirus shock as lower overall economic growth and revenue coupled with higher government expenditure will lead to wider fiscal deficits and higher debt.”
“Higher debt levels, weaker debt affordability (amid both lower revenue and higher interest payments) and low buffers will challenge SSA sovereigns’ institutional capacity to manage economies, public health, budget positions, financing strategies, reserves and social discontent, thus elevating event risk,” added Moody’s.