In brief
- Ghana witnessed a 200bps y/y slowdown in overall real GDP growth to 3.1% in FY2022 as the relentless FX shocks expectedly weighed on price-sensitive sectors amidst a slowdown in agrarian output.
- High input cost weakened growth in the agricultural sector to 4.2% as Government’s decision to slash fertilizer subsidy, together with the effect of drought and illegal mining in agrarian zones, undermined expansion of the heavily-weighted crops sub-sector.
- The oil & gas sector contracted for the 3rd consecutive year (-6.7% y/y) as the higher crude oil prices failed to stimulate growth in an industry already struggling with under-investment. However, gold production rebounded strongly to support mining & quarrying output (+8.1% y/y), lifting the overall industry growth into a positive territory of 0.9% y/y.
- Finance & insurance activities surprised to the upside, growing by 5.7% y/y (vs 2.4% in 2021) while ICT sustained its robust momentum with a 19.7% y/y expansion, albeit below the 33.1% outturn in 2021. With the impact of de-recognition, and modification losses from the domestic debt exchange yet to fully reflect in the finance and insurance activities growth, we expect a lower revised FY2022 growth rate, and potentially lower FY2023 growth for the finance & insurance sub-sector.
- In view of the already weakened private sector activity occasioned by the price shocks last year, we foresee further headwinds to growth in 2023 as the immediate policy framework favours stability over growth. With the Treasury’s aggressive posture on revenue mobilization, coupled with banks’ low appetite for higher risk, businesses may have to batten down the hatches in 2023.
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