The World Bank is forecasting a 5.5% expansion of the Ghanaian economy in 2022

The projected growth rate is however lower than the International Monetary Fund’s 6.2% Gross Domestic Product (GDP), but higher than Sub-Saharan Africa’s average of 3.6%.

According to its January 2022 Global Economic Prospects report, Ghana will certainly become one of the fastest growing economies in Sub Saharan Africa, based on the forecast by the World Bank. The government of Ghana is however projecting an overall GDP of 5.8% in 2022.

The report said elevated commodity prices are projected to both support recovery in extractive sectors and boost export and fiscal revenues. This will help ease some pandemic induced fiscal pressures and external financing needs.

The World Bank also forecast a growth rate of 5% in 2023, but maintained the 4.1% GDP for last year

Fiscal pressures

It however pointed out that many Sub Saharan Africa countries including Ghana and Rwanda witnessed a marked deterioration in fiscal balances because of deployed relief measures, depleting already-narrow fiscal space. This, together with constraints on financing and pressures to improve debt sustainability, will lead to a much less supportive fiscal stance across the region over the forecast horizon.

“Many SSA countries saw a marked deterioration in fiscal balances because of deployed relief measures, depleting already-narrow fiscal space (Ghana, Mozambique, Rwanda). This, together with constraints on financing and pressures to improve debt sustainability, will lead to a much less supportive fiscal stance across the region over the forecast horizon.”

“Fiscal adjustments are expected to predominantly happen on the expenditure side with a bigger reduction in fiscal deficits in resource-rich countries, partly reflecting revenue boosts from higher commodity prices and consolidation efforts in some countries”, it added.

The report however said fiscal space is expected to remain tight with below-trend recoveries restraining revenue growth, elsewhere in the region.

Growth in SSA expected to firm in 2022-23

The report also said growth in Sub Saharan Africa is expected to firm in 2022-23, but to remain below its long term average rate in most cases, with lagging vaccination rates holding back the recovery.

Per capita income growth in 2022-23 will also be insufficient in many SSA countries to reverse the severe setbacks caused by the pandemic in 2020-21

“The pandemic has reversed at least a decade of gains in per capita income in some countries—in almost a third of the region’s economies, including Angola, Nigeria, and South Africa, per capita incomes are forecast to be lower in 2022 than a decade ago. After barely increasing last year, per capita incomes are projected to recover only at a subdued pace, rising 1.1 percent a year in 2022- 23, leaving them almost 2 percent below 2019 levels.

Economy expanded by 6.6% in quarter 3, 2021

Ghana’s economy expanded by 6.6% in the 3rd quarter of 2021.

According to data from the Ghana Statistical Service, the main sub-sectors that expanded in quarter three of 2021 were Education (24.2%); Health & Social Works (20.5%); Information & Communication (17.0%); Professional Administrative & Support (16.7%); Hotel & Restaurants (16.4%); Public Administration & Defence, Social Security (16.3%), Fishing (14.3%); Real Estate (11.5%); Crops (9.8%).

For sectoral growth rates, the Services sector recorded the highest growth rate of 13.4%, followed by the Agriculture sector with 9.2%.

However, Industry contracted by 2.0%. This was as a result of contraction in the mining sub sector.

The economy expanded by 6.6 percent in the 3rd quarter of last year. Education; Health & Social Works; Information & Communication, as well as Hotel & Restaurants drove the growth rate. Meanwhile, the per capita incomes are forecast to be lower in 2022 than a decade ago, due to the impact of Covid-19 on economies on the continent. However, they are expected to rise by 1.1 percent in 2022 and 2023.