S&P predicts positive economic outlook for Ghana from 2024
Ghana’s economic outlook is expected to improve in the coming years, according to recent reports from rating agency S&P. The agency predicts that the economy will rebound to the 5% bracket from 2024, expanding by 5.1% in that year, and continuing to grow at rates of 5.4% and 5.5% in 2025 and 2026, respectively. This is welcome news for Ghana, which has seen a decline in its economy in recent years due to exchange rate fluctuations and other challenges.
However, S&P has affirmed its GDP growth rate of 3.0% for Ghana in 2023, which is only slightly higher than the government’s forecast of 2.8%. While this rate of growth may seem modest, it is still a positive sign that the economy is on the road to recovery. Moreover, S&P’s projection that the economy will remain relatively stable at around $68 billion in size for 2023-2025 suggests that Ghana is on a sustainable path of growth.
S&P’s projection for Ghana’s GDP per capita, on the other hand, is less optimistic. The agency predicts that it will remain around $2,000 in 2023 and 2024, but will fall to around $1,900 in 2025. This downward trend is somewhat concerning, as higher GDP per capita figures are generally seen as a sign of a healthy, growing economy. However, it is worth noting that Ghana’s GDP per capita stood at around $2,500 in 2021 post-Covid-19, so the country has made significant progress in recent years.
One of the key drivers of Ghana’s economic growth in the second quarter of 2022 was the Manufacturing sector, which grew by 8.8%. Crops and Cocoa, Mining and Quarrying, Information and Communication, and Education were also significant contributors to the overall growth rate of 4.8% in that quarter. This diverse mix of sectors is encouraging, as it suggests that Ghana’s economy is not overly reliant on any one industry.
However, there are still some concerns that Ghana will need to address in order to maintain its economic growth over the long term. For example, the savings to GDP ratio has been steadily declining in recent years, from 19.6% in 2018 to 13.9% in 2022. This trend could be an indication that Ghanaians are not saving as much as they should be, which could lead to a lack of investment in the country’s future growth.
Despite these challenges, there are reasons to be optimistic about Ghana’s economic future. The country has a growing population, a diverse economy, and significant natural resources, all of which bode well for its long-term prospects. If Ghana can address its current challenges and continue to invest in its people and infrastructure, it has the potential to become a major player in the global economy in the years to come.
