[ 2021-02-03 ]

Standard Bank forecasts 3.5% growth rate for Ghana in 2021

Source: Charles Nixon Yeboah

Standard Bank, parent company of Stanbic Bank
Ghana is forecasting a growth rate of 3.5% for
Ghana this year.

This is a little below that of the International
Monetary Fund, Moody’s and Fitch Solutions,
which have all projected more than 4.0% Gross
Domestic Product in 2021

The report also said the size of the Ghanaian
economy will remain unchanged at $63 billion,
approximately GH¢421 billion.

According to Standard Bank, COVID-19 pandemic will
undoubtedly affect economic growth meaningfully.

“Whereas growth of 6% to 8% year-on-year in the
next two to three years seemed reasonable before,
1.0% year-on-year growth now seems likely in 2020,
with a recovery from this year onwards”, it
emphasized.

Additionally, “Ghana’s oil production will be
restrained due to the oil price decline and a
depressed demand outlook with the uncertain
timeframe a further risk.”

The report also said consumer spending is now
expected to grow at 2.5% year-on-year as against
the previously expected 4.9%.

It pointed out that over the medium term,
improving economic and political conditions will
bode well for Ghanaian consumers, although
disposable income remains low, with spending
concentrated on essential items.

However, enhancing access to loans should assist
consumers, while inflation is expected to be well
managed.

Despite Ghana being classified as one of the
fastest growing economies, Standard Bank said this
has yet to translate into improved living
standards for many Ghanaians.

A large share of consumer goods are imported from
South Africa, China, Europe and the Middle East.
Yet, due to the relatively small size of the
modern retailers, the country remains dependent on
small- to medium-sized multi-brand importers that
often rely on shipments from third party
countries, which increases unit prices.

“It is common for the younger generation to
consume packaged food such as confectionery and
savory snacks. However, majority of the population
still stick to Ghana’s indigenous cuisine and
the ingredients used to prepare it ranges from
rice, yam, plantain and maize. Packaged instant
maize and other instant starches that only need
water to be added are gaining popularity as they
reduce cooking time”.

Economy contracted in Quarter 3

Ghana’s economy entered into recession in the
third (-1.1%) of 2020.

The Agriculture sector however recorded the
highest growth of 8.3%, whilst Industry and
Services sectors contracted by 5.1% and 1.1%
respectively.

Based on expectations, it is expected to rebound
in the final quarter which the figures are yet to
be released by the Ghana Statistical Service.

Source -

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