Ghana Economy Contracts First Time in Four Years on Lockdown
Ghana Economy Contracts First Time in Four Years on Lockdown
(Bloomberg) -- Ghana’s economy contracted in the second quarter for the first time in four years as lockdown restrictions to curb the coronavirus stalled activity and oil prices slumped.
Gross domestic product shrank 3.2% in the three months through June from a year earlier, Samuel Kobina Annim, government statistician, said Wednesday in the capital, Accra. That compares with growth of 4.9% in the first quarter. The median of six economists’ estimate in a Bloomberg survey was for a contraction of 3.8%.
The West African economy is one of less than 20 in sub-Saharan Africa that are still projected to expand this year, albeit at the slowest pace in almost four decades. While lockdown restrictions were eased in May, many manufacturing companies remained closed, Annim said. With borders that were only opened recently, the hotels industry contracted by 79.4%, he said.
Quarter-on-quarter GDP shrank by 0.8%. The second-quarter data may put the government’s projection of 0.9% growth at risk.
“The economic gains that were made in the last couple of years have been eroded and no one knows when the pandemic is going to end,” Agyapomaa Gyeke-Dako, a senior lecturer in economics at the University of Ghana Business School, said by phone before the release of the data.
The last time quarterly GDP in Africa’s biggest gold producer contracted was in 2016 ahead of a vote in which the opposition defeated the incumbent. The nation heads to the polls again in December and the economy will be a key factor as President Nana Akufo-Addo goes up against his predecessor John Mahama of the National Democratic Congress to renew his mandate.
Key Points
- The non-oil GDP contraction for the second quarter stood at 3.4% year-on year
- Industry contracted 5.7% over the same period
- Services shrank 2.6%, dragged down by a 79.4% contraction of the hotels industry
- Within the services sector, information and technology, which includes data providers, however grew by 74.2%
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