Ghana is targeting a post-COVID economic growth of 5.8% in 2022, less than the forecasted 6.2% by the International Monetary Fund (IMF).
Presenting the 2022 budget and economic policy to parliament on Wednesday, November 17, Finance Minister Ken Ofori-Atta pointed out that the government was projecting overall Real GDP growth of 5.8%.
Non-oil real GDP growth is expected to be 5.9%, end of year inflation rate of 8% and a fiscal deficit of 7.4%.
The new projection also dwarfs the 3.8% that the IMF has projected for Sub-Saharan Africa for 2022, contained in the October 2021 Regional Economic Outlook for Sub-Saharan Africa, titled “One Planet, Two Worlds, Three Stories.”
Ghana’s target is also higher than the World Bank forecast for 2022.
The Bretton Wood institution is forecasting a 5.5% expansion in the economy in 2022, reflecting strong growth in exports.
“Ghana is projected to exhibit growth of, respectively, 4.9% and 5.5% in 2021 and 2022, reflecting strong growth in exports. The economy performed relatively well despite the outbreak of the Delta variant thanks to the fiscal support by the government”, the report explained.
It is worthy of note that the higher growth rate indicates that businesses will be able to generate more revenue from sales and expand into the future.
However, these higher growth rates have not really translated into real jobs and rapid improvement of the livelihood of the people.
The disclosure by the Finance Minister confirms the Bank of Ghana’s data which points to a boost in economic activity.
In the September 2021 Monetary Policy Committee Report, the BoG said its “Composite Index of Economic Activity (CIEA) for July 2021 reflected continued recovery in domestic economic activity. The real CIEA recorded a 20.0% year-on-year growth in July 2021, compared with 20.2% in June 2021, and 3.9%t growth in July 2020. The growth in the indicators were somewhat broad-based with port activity, imports, domestic VAT, and air-passenger arrivals accounting for the increase.”
Data from the Ghana Statistical Service indicated a stronger pick up in the annual GDP growth to 3.9% in the second quarter of 2021, from the 3.1% recorded in the first quarter, and a 5.7% contraction recorded in the same period of 2020. Non-oil GDP, for the same period, grew by 5.2%, compared with a contraction of 5.8% recorded for the same period in 2020.