Ghana’s GDP grows at fastest pace in 5 years, beats estimates

Bloomberg | Ghana’s economy expanded at its fastest pace in five years in the second quarter, beating economists’ estimates by more than double, after better performances in its three largest sectors.

Gross domestic product (GDP) grew 6.9 percent in the three months through June from a year earlier, compared with a revised 4.8 percent in the prior quarter Government Statistician Samuel Kobina Annim told reporters in the capital, Accra, on Wednesday. The median of three economists’ estimates in a Bloomberg survey for expansion was 3.3 percent.

The cedi traded relatively unchanged at 15.7 per dollar at 10:56 a.m. in the capital, Accra. Ghana bonds maturing in 2032 rose 0.2 cent to 52.59 cents on the dollar.

The better-than-expected outcome may boost Vice President Mahamudu Bawumia’s election campaign. Bawumia, who is the ruling New Patriotic Party’s presidential candidate for the December 7 vote, is considered the underdog to opposition leader John Mahama for the top job because of public frustration over the NPP’s handling of the economy and the high cost of living.

The West African nation is exiting a prolonged debt restructuring and is in the second year of an International Monetary Fund program that’s included painful austerity measures.

Bawumia has said he would lift economic growth to an average of 6 percent a year by boosting agriculture and small businesses, and through new mining projects if elected president. He also pledged to use technology to make the government more efficient and to introduce a “friendly” tax regime to spur the private sector.

The industrial sector grew by an annual 9.3 percent in the period, after expanding 6.8 percent in the first quarter. Growth in the agriculture and services sectors accelerated to 5.4 percent and 5.8 percent respectively, compared with a revised 4.7 percent and 3.2 percent previously.

The better showing in agriculture, which employs an estimated 40 percent of the workforce, came even as the cocoa subsector contracted for a fourth straight quarter by 26.2 percent. Ghana is the world’s second largest producer of the ingredient used in chocolate and has seen production slump because of adverse weather, disease, a lack of inputs and smuggling of the beans.