Ghana: 5.4 Percent Growth Rate in 2021 Signals Rebound of Economy - Finance Ministry

The Ministry of Finance (MoF) has said the 5.4 per cent Gross Domestic Growth (GDP) achieved last year signalled a rebound of the Ghanaian economy.

Data released by the Ghana Statistical Service a couple of weeks ago indicated that the country recorded a provisional real GDP growth of 5.4 per cent which is one per cent higher than the 4.4 projected by the government.

The MoF in a statement issued in Accra on Tuesday said the 2021 growth rate showed that the economy had expanded more than was anticipated and exceeded the Sub-Saharan Africa (SSA) average growth of 4.5 percent for 2021.

"These developments are positive and confirm the fact that, the economy is rebounding post-COVID-19, the rate of debt accumulation is tapering off, and there is a slowdown in fiscal expansion with Ghana on track to return to the Fiscal Responsibility Act deficit threshold of five percent of GDP by 2024," the Finance Ministry said.

Figures released by the GSS indicated that real GDP expanded by 7.0 percent in the fourth quarter of 2021 compared to the 4.3 per cent growth recorded in the corresponding period of 2020. Similarly, non-oil real GDP in the fourth quarter of 2021 expanded by 7.6 percent compared to 5.7 percent for the same period in 2020.

"On an annual basis, the provisional real GDP growth for 2021 showed a positive outturn of 5.4 percent, exceeding the 4.4 percent 2021 projected outturn by one percentage point and the Sub-Saharan Africa average growth by 0.9 percentage point," the statement said.

Similarly, the statement said the non-oil real GDP expanded from 1.0 percent in 2020 to 6.9 per cent in 2021 (the highest non-oil real GDP growth rate since the rebasing was done in 2013) exceeding the target of 5.9 per cent for the period.

In a related development, the MoFsaid Ghana's public debt stock had declined from 80.1 per cent of Gross Domestic Product (GDP) to 76.6 per cent at the end of 2021.

The MoF further said the 2020 debt stock had also reduced from 76.1 per cent to 74.4 per cent and the fiscal deficit (including energy and Finsec payments) was showing a decline (as a percent of GDP) from 15.0 percent to 14.7 percent of GDP for 2020, and the fiscal deficit of 2021 had reduced from 11.7 per cent to 11.4 percent.

"This is a further confirmation that the rate of debt accumulation has slowed to pre-pandemic levels," the MoF said.

Ghana's total public debt which stood around 62.4 per cent of GDP (GH¢218 billion) at the end of 2019 and below the international threshold of 70 per cent shot to 76.6 per cent of GDP in 2020 due to the spending government made on the COVID-19 pandemic.

The statement said the MoF would update its debt sustainability analysis (DSA) and revise its GDP projections for 2022 and the medium-term to reflect the positive developments in 2021.

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