Economic growth slows in 2019 Q2

Professor Samuel Kobina Annim, Government Statistician

Ghana’s economic has recorded a slower growth more than projected in the second quarter to 5.7 percent from 6.7 percent for the first three month of this year.

According to the Ghana Statistical Service (GSS), the slow growth has largely been attributed to contraction of the construction sector, partly due to a lack of infrastructure spending by the government. The sector which declined by 8.3 percent during the second quarter.

Domestic production and import of cement or cement clinker are used as an indication of the growth of the construction sub-sector. During 2019 quarter-two, there was reduction in the domestic production of cement by GHACEM by 15 percent, DIAMOND cement by 20 percent and DANGOTE cement by one percent.

There was however a four percent increase in the importation of cement and cement clinker to offset the reduction in the domestic production. The result is the contraction of 8.3 percent in the Construction sub-sector.

Other sectors contributing to the slower growth for the quarter includes the water and storage, waste management and remediation activities which was down at 7.9 percent and electricity shrank 7.5 percent. That weighed on industry, which accounts for about a third of GDP.

The non-oil GDP growth rate of 4.3 percent for the second quarter is 0.7 percentage points lower than the growth rate of 5.0 percent recorded in the same period of 2018.

The reason could be attributed to the performance of the Mining and Quarrying sub-sector when Oil and Gas activities are excluded. The Mining and Quarrying sub-sector, excluding Oil and Gas activities grew by three percent in the second quarter of 2019 compared with an expansion of 15 percent in the same period.

GDP at current prices for the second quarter of 2019 was estimated at GHc 84,126.1 million. The corresponding value recorded for same period in 2018 was GHc 72,500.4 million.

In constant terms, the period’s GDP was estimated at GHc 39,952.6 million. For same period of 2018, the estimate value was GHc 37,804.9 million.

Industry Sector

The Industry sector’s performance was due to high growth rates in Mining and Quarrying at 14.0 percent and Manufacturing at 7.4 percent, subsectors.

Services Sector

The growth rate of 6.5 percent in the Services was due to high growth rates in Information and Communication at 52.8 percent, Real Estate at 14.9 percent, Health and Social Works at 10.3 percent, Education at 8.9 percent and Hotels and Restaurants at 6.6 percent sub-sectors.  Contraction in the Public Administration, Defence and Social Security impacted negatively on the Services’ sector performance.

Agriculture Sector

The Fishing sub-sector recorded -2.1 percent growth rate is as result of reduction in value addition for Marine by -2 percent and Aquaculture activities by -27 percent. Value addition in Inland fishing expanded by 24 percent.

Forestry and Logging sector recorded a contraction of 6.5 percent within the sub-sector, due to the decline of -22 percent in value addition of Logging activities which accounts for about 80 percent of activities within the sub-sector.

For the Crops & Cocoa sub-sector, value addition in Cocoa production increased by 5.6 percent over the 2018 second quarter estimate and that of Crops (excluding Cocoa) expanded by 3.8 percent in 2019 second quarter.