Latest GDP growth: Foundation, not finish line

The country’s economy expanded by an average of 6.3 per cent in the first nine months, a significant increase from the 2.6 per cent recorded during the same period in 2023. 

This growth was fuelled by quarterly expansions of 4.8 per cent in the first quarter, 7.0 per cent in the second quarter, and 7.2 per cent in the third quarter—the highest quarterly GDP growth in the last five years.

Growth in the non-oil sector has also been strong, posting an average growth rate of 6.2 per cent for the first three quarters of 2024, compared to 2.6 per cent in the same period last year.

Quarterly growth figures for the non-oil economy were 4.3 per cent in Q1, 6.6 per cent in Q2 and 7.7 per cent in Q3.

In addition, the Minister of Finance, Dr Amin Adam, told the media at a press briefing yesterday that the country’s Gross International Reserves currently stood at $8 billion, equivalent to 3.5 months of import cover.

Private sector credit growth also showcased the recovery, with nominal growth reaching 28.7 per cent in October 2024, a sharp turnaround from the contraction of 7.5% recorded in the same period in 2023.

On the external front, a trade balance surplus of $3.85 billion and a current account surplus of 2.6 per cent of GDP were recorded for the first nine months of 2024.

Headline inflation has also reduced to 23 per cent in November 2024 from a high of 54 per cent in December 2022, while “the total public debt decreased by GHc46.8 billion from GHc807.79 billion in September 2024 to GHc761.01 billion in October 2024, bringing the debt-to-GDP ratio down from 79.2 per cent to 74.6 per cent, and we are on track to reduce it further to 55 per cent in net present value terms, ensuring long-term debt sustainability.”

While these data present a compelling narrative of resilience and recovery, the Daily Graphic believes there is still more work to be done to support the full recovery of the economy. The country must therefore approach this apparent success with measured optimism and a clear-eyed view of the challenges that remain.

We must contextualise these achievements within the recent economic history.

The country has just emerged from a challenging period of debt restructuring, and while the current growth defies the typical post-restructuring pattern of one to two per cent growth, this exceptional performance should not mask the fundamental reforms which are still needed to ensure sustainable economic health.

The sectoral breakdown reveals both strengths and areas requiring attention. The industrial sector's impressive 8.9 per cent average growth, driven by the mining and quarrying sub-sector’s 15 per cent expansion, raises questions about our continued dependence on extractive industries.

While this growth is welcome, it highlights the urgent need to diversify our industrial base beyond natural resources.

The manufacturing sector's modest 3.1 per cent growth underscores this concern – we need stronger manufacturing performance to create quality jobs and add value to our raw materials.

The services sector's five per cent growth, particularly the stellar performance in Information and Communication at 15.9 per cent, points to the country’s potential in the digital economy.

Yet, the relatively modest growth in transport and storage (3.8 per cent) suggests infrastructure gaps that could constrain future economic expansion.

These disparities within the services sector indicate the need for more balanced development across all sub-sectors.

Agriculture, growing at 4.6 per cent, demonstrates stability but falls short of the sector's potential, given the country’s favourable climate and arable land. The consistent performance in crops and livestock is commendable but modernising agricultural practices and improving value chains could yield significantly higher growth rates and better food security outcomes.

The Daily Graphic is also of the view that these growth figures must be viewed against the backdrop of everyday economic realities. While GDP numbers are impressive on paper, many Ghanaians still grapple with high cost of  living, unemployment and limited access to essential services.

The true measure of economic success lies not just in statistical achievements but in tangible improvements in citizens' living standards.

To realise this, the government's ability to sustain this growth trajectory while addressing structural weaknesses will be crucial. Priority should be given to reducing bureaucratic bottlenecks, improving infrastructure, strengthening institutions and creating a conducive private sector environment.

The current growth momentum provides an opportunity to implement these reforms from a position of relative strength.

Looking ahead, Ghana's economic trajectory appears promising but the current growth figures should not be an endpoint but a foundation upon which to build.

As Ghana continues its economic recovery, maintaining a delicate balance between celebrating progress and acknowledging the remaining challenges will be crucial for charting a path towards sustainable and inclusive growth.