Ghana’s economy experienced a mixed performance in 2024, achieving an overall annual growth rate of 5.7 percent but witnessing a significant slowdown in the final quarter. While the first three quarters likely contributed substantially to the overall positive growth, the last quarter of the year registered a considerably lower growth rate of 3.6 percent, a sharp decline from the robust 7.2 percent expansion observed in the third quarter. This deceleration raises concerns about the sustainability of the growth momentum and signals potential challenges facing the Ghanaian economy. A deeper analysis of the sectoral contributions is essential to understand the underlying dynamics driving this slowdown.
The industrial sector emerged as the primary culprit behind the fourth-quarter deceleration. Recording a meager 0.2 percent growth, the sector’s performance represents a stark contrast to its likely contribution in earlier quarters. Within the industrial sector, the mining and quarrying sub-sector experienced a particularly harsh contraction, significantly impacting the overall industrial output. Given that mining and quarrying constitute approximately 43 percent of the total value generated by the industrial sector, its underperformance had a disproportionately large effect on the overall economic growth figures. Further investigation into the factors contributing to the contraction in this crucial sub-sector, such as commodity price fluctuations, operational challenges, or regulatory changes, is necessary to inform policy responses and mitigate future risks.
Despite the industrial sector’s struggles, the services sector maintained its position as the dominant force in the Ghanaian economy. Accounting for 49.2 percent of the total GDP output, the services sector continued to demonstrate its resilience and importance to the national economy. This sector’s consistent contribution underscores its role as a key driver of growth and employment. However, a more granular analysis of specific service sub-sectors, such as finance, tourism, and telecommunications, would provide a more nuanced understanding of its performance and potential vulnerabilities.
While agriculture contributes a smaller proportion to Ghana’s GDP compared to services and industry, it remains a significant sector, accounting for 19.0 percent of total output. Its performance in the fourth quarter, though not explicitly detailed in the provided information, is crucial to understanding the overall economic picture and the welfare of a significant portion of the Ghanaian population. Further data on agricultural output and its sub-sectors would shed light on the sector’s contribution to the overall economic slowdown or growth.
Analyzing the GDP figures in both constant and nominal terms offers a more comprehensive perspective on Ghana’s economic performance. At constant 2013 prices, the oil GDP for the fourth quarter stood at GH₵53,137.0 million, signifying the value of oil production adjusted for inflation. In contrast, the non-oil GDP reached GH₵50,262.5 million, highlighting the contribution of all other economic activities excluding oil. The nominal GDP at basic prices, which reflects the current market value of all goods and services produced, reached GH₵308,086.5 million. Comparing these figures reveals the relative contributions of oil and non-oil sectors and provides insights into the economy’s structure and potential vulnerabilities to external shocks, such as fluctuations in global oil prices.
The provided data reveals a concerning trend of economic deceleration in Ghana during the final quarter of 2024. While the overall annual growth rate of 5.7 percent appears positive, the sharp decline in the fourth quarter’s growth to 3.6 percent, primarily driven by the significant contraction in the mining and quarrying sub-sector, calls for a more in-depth analysis of the underlying factors. Understanding the specific challenges faced by the industrial sector, while acknowledging the continued strength of the services sector and the consistent contribution of agriculture, is crucial for policymakers to formulate appropriate strategies for sustained and inclusive economic growth. Further investigation into the individual sub-sectors within each major sector, along with an assessment of the long-term implications of the fourth-quarter slowdown, will be essential for informed decision-making and ensuring the continued economic prosperity of Ghana. This analysis should also consider external factors, such as global economic conditions, to get a holistic view of the situation and formulate appropriate responses.
