Ghana and four other countries will become the top performing countries in growth in Sub Saharan Africa this year, amid covid-19, according to the latest World Bank’s Africa Pulse Report.
The World Bank report is coming at a time in which institutions like Fitch and Goldman Sachs have all forecast more than 1.0% Gross Domestic Product growth rate for this year.
Their projections put the country’s economy far above Sub-Saharan Africa’s average of a contraction of 3.3%.
Agriculture is expected to drive the GDP growth rate as it was the only sector that grew in the second quarter of this year.
The other four countries that will join Ghana as the top performing nations are Ivory Coast, Ethiopia, Guinea and Rwanda.
This group houses 18 percent of Sub Saharan Africa’s population of 193 million and produces 14 percent of the regions GDP.
The report however said that activity among non-resource-intensive countries, including Ghana, Ivory Coast and Senegal, will slow but not contract. Its economic growth rates would be helped by relatively more robust growth in the agriculture sector.
While Sub-Saharan African countries have not seen the worst of COVID-19 as expected, the pandemic has significantly damaged the region’s economy. Efforts to stem the spread of the coronavirus have halted or reversed economic gains, sparking the region’s first recession in 25 years
Impact of covid-19
The report said COVID-19 pandemic has taken a large toll on economic activity in Sub-Saharan Africa, putting a decade of hard-won economic progress at risk.
Economic activity in the region is expected to contract by 3.3% in 2020, confirming the prediction that Sub-Saharan Africa would suffer its first recession in a quarter-century in 2020.
By the end of 2021, the region’s real GDP per capita will likely regress to its level in 2007.
In Africa, COVID-19 could push up to 40 million people into extreme poverty, erasing at least five years of progress in fighting poverty.
Road to recovery to be long
According to the report, the road to recovery will be long and steep, and it must be paved with sound economic policies.
It said countries need to reconstitute their fiscal space to finance programs that can stimulate recovery, improve debt management, and fight corruption.
Ultimately, sustained recovery will depend on how fast African countries prioritize policy actions and investments that address the challenge of creating more, better, and inclusive jobs. These policy priorities, in turn, operate through three critical and interrelated channels: digital transformation, sectoral reallocation, and spatial integration. Several countries in the region are seizing the opportunity of the crisis to accelerate these reforms.
Q2 GDP results
Ghana’s economy contracted by -3.2% in the second quarter of this year, the first time it has contracted since 1983.
According to figures released by the Ghana Statistical Service, the heavy fall was largely attributed to some restrictions on activities in the economy, which virtually came to a standstill during the partial lockdown period, as a result of the Coronavirus outbreak.
The information and communication sub-sector recorded the highest expansion of 74.2%, while the hotel and restaurants sub-sector also recorded the highest contraction of 79.4%.