Industrial growth slows despite manufacturing gains in Q1 2025

GHANA’s industrial sector recorded the slowest growth among the three major economic sectors in the first quarter of 2025, expanding by 3.4 per cent year-on-year.

The sector contributed 1.09 percentage points to the country’s Gross Domestic Product (GDP) growth, lagging behind the Services sector’s 2.54 points and Agriculture’s 1.40 points contribution.

This was contained in figures released by the Ghana Statistical Service (GSS) last Wednesday.

Manufacturing emerged as the standout performer within the industrial sector, recording a robust 6.6 per cent year-on-year growth and 1.9 per cent quarter-on-quarter increase, signaling steady progress in local production and value addition.

However, the Oil and Gas sub-sector contracted significantly by 22.1 per cent due to reduced crude oil production from mature oil fields and technical setbacks in exploration activities.

This decline resulted in a negative contribution of 1.15 percentage points to national GDP growth, effectively offsetting gains recorded in other industrial segments.

The broader Mining and Quarrying sub-sector, which includes oil and gas, managed only a marginal 1.4 per cent growth, sustained primarily by increased gold production.

Utilities and construction

Other industrial segments that recorded poor performances in Q1 2025 included the water supply and sewerage sub-sector, which declined by 3.7 per cent, reflecting weak infrastructure investment and operational challenges among public utilities.

The electricity sub-sector grew by a modest 2.8 per cent, while construction expanded by just 1.5 per cent.

Overall economy

Ghana’s overall economy recorded 5.3 per cent year-on-year growth in the first quarter of 2025, driven primarily by strong performances in the services and agriculture sectors.

The Services sector emerged as the leading contributor to GDP growth, accounting for 46.8 per cent of total GDP. 

Significant contributions came from Information and Communication (13.1 per cent growth), Finance and Insurance (9.3 per cent) and Transport and Storage (8.6 per cent).

Agric

Agriculture posted the highest sectoral growth rate, expanding by 6.6 per cent year-on-year and contributing 1.40 percentage points to GDP growth.

The sector’s performance was driven by a 16.4 per cent surge in the Fishing sub-sector and 6.7 per cent growth in crops, including cocoa. The livestock sub-sector also recorded 5.6 per cent growth.

However, Forestry and Logging contracted by 2.5 per cent, slightly dampening the overall agricultural gains.

Recommendation

The Government Statistician, Dr Alhassan Iddrisu, expressed optimism regarding the economy’s trajectory, saying first-quarter performance signalled a rebound.

To sustain growth and distribute the gains of economic expansion more equitably, he outlined some sector-specific recommendations.

He said that with agriculture growing at 6.6 per cent and the strong momentum in crops and fishing, households can benefit from government input subsidies and training under the Agriculture for Transformation Programme to support food security and income.

He added that the resulting boost in local food production is also expected to ease inflation and improve household purchasing power.

In the Services sector, he advised households to explore night-shift opportunities under the 24-Hour Economy initiative in the expanding service economy

“With transport, ICT and trade services expanding, businesses in logistics, delivery, customer service, and manufacturing should adjust working models to 24-hour cycles where feasible.

Manufacturing grew by 6.6 per cent despite the oil sector decline. SMEs should leverage infrastructure, including roads, irrigation and storage facilities to source local inputs and access markets under the African Continental Free Trade Area (AfCFTA) and the Big Push Programme,” he stated.

Dr Iddrisu said while Mining & Quarrying grew modestly by 1.4 per cent, the steep contraction in Oil and Gas (-22.1 per cent) highlights the need to strengthen non-oil mineral value chains.

He said the scaling-up activities of the Gold Board can help stabilise export earnings and generate a broader developmental impact.

“Accelerating the Big Push investments in power, roads, and digital infrastructure could support private sector expansion and enhance regional competitiveness, thereby unlocking industrial growth beyond the 3.4 per cent growth,” the government statistician said.

24-Hour economy 

Meanwhile, the government has announced its plans to officially launch the 24-hour economy policy in July, most likely on Republic Day, as part of a bold new agenda to transform Ghana’s productivity and export capacity.  

The policy is a structured plan to drive industrial growth, job creation and efficient resource utilisation.  

“We will officially launch the 24-hour Economy programme in July this year, most probably on Ghana's Republic Day, which is a symbolic day for a bold new national agenda.

“The 24-hour Economy policy reflects a state where Ghana's productivity and capital utilisation will become so high that we will have to operate in multiple shifts across day and night, maximising the return on infrastructure, on human resources and innovation,” President Mahama said.  

Assurance 

In response to the report, he said fiscal indiscipline in the past had thrown the macro-economy off balance, creating instability, a depreciating currency and other challenges.

That, he said, affected all Ghanaians as it impacted the quality and standard of living.

He stressed that a healthier macroeconomic environment offered greater predictability to investors and business people, allowing them to plan more effectively.

“An appreciating and stable currency also improves our earnings. It is in our interest that the macro economy is stable, our currency is stable and our economy is growing and delivering prosperity for our people,” he said.

On the GDP figures, President Mahama said, “The first quarter results have come in at around 5.4 per cent, which indicates that the economy is returning to a normal growth path. This should be viewed as a good sign for us.

If we close the year with a growth rate of around five per cent, it would mean the economy is expanding rather than contracting.”

He assured that the government will continue to focus on growth to ensure stability across all sectors and greater prosperity for citizens.