Banking crisis deepens woes of financial and insurance sector – GSS

Baah Wadieh, Acting Government Statistician, GSS

The provisional Gross Domestic Product (GDP) data released by the Ghana Statistical Service (GSS) has revealed that the financial and insurance sector recorded an abysmal performance in second quarter of 2018, as compared to the same period 2017.

Although the sub-sector last year experienced a contraction of -8.6 percent, the second quarter of 2018 contracted further to reach -13.4, representing a 4.8 percentage points reduction.

In an interview with Goldstreet Business, the Acting Government Statistician, Mr. Baah Wadieh attributed the contraction in the growth of the sub-sector to the recent developments within the sector.

“We have seen the collapse of certain local banks, and there is a lot of banking activity which has also dwindled and these are affecting the performance of the sub-sector,” Wadieh enumerated.

“If the negative situation persists going forward and continued to record negative growth rate, then the contraction in that sector would affect the overall GDP growth rate,” he stated.

GDP growth

The year-on-year provisional real GDP, including oil, for the second quarter of 2018 grew by 5.4 percent, compared to 11.1 percent recorded for the same period of 2017.

The oil GDP estimate which stood at constant prices in 2013, for the second quarter of 2018 was GH¢37,804.9 million compared to GH¢35,869.3 million in the second quarter of 2017.

Wadieh explained that although the rate of growth is slower for 2018 second quarter, it still remained positive, which indicates a fair growth in the economy.

The Industry sector recorded the highest growth of 11.1 percent, followed by the Agriculture sector with 4.8 percent and Services with 0.5 percent.

Service Sector

In the Services sector, the Finance and Insurance sub-sector recorded the least growth rate of -3.8 percent.

Under the same sector, Health and Social Work grew by 5.9 percent, same as the growth rate recorded in the first quarter of 2018, whereas the Information and Communication sub-sector grew by 3.3 percent in the second quarter of 2018 compared to 3.7 percent in the first quarter of 2018.

Agriculture Sector

In the Agriculture sector, the Livestock sub-sector grew by 1.1 percent, compared to 1.3 percent in the first quarter of 2018. The Crops sub-sector grew by 1.0 percent in the 2nd quarter of 2018, compared to 1.4 percent growth recorded in the first quarter of 2018.

The Fishing sub-sector recorded the least growth rate of 0.5 percent within the Agriculture sector.

Industry Sector

Within the Industry sector, the Mining and Quarrying sub-sector grew by 5.9 percent in the second quarter of 2018, compared to 5.7 percent in the first quarter of 2018. The Electricity sub-sector grew by 2.3 percent in the second quarter of 2018, compared to 0.2 percent growth recorded in the first quarter of 2018.

Water and Sewerage sub-sector recorded the least growth rate of -0.9 percent, compared to 0.4percent in the first quarter of 2018.

By Joshua W. Amlanu