World Bank has pointed out in its October 2022 Africa Pulse Report that Ghana’s growth is expected to slow in 2022 to 3.5%, far below the country’s average pre-pandemic performance of 7%.
The Ghanaian economy, according to Bretton Wood institution has been struggling with various setbacks, including rising public debt (104.6% of Gross Domestic Product), elevated inflation (33.9% in August 2022), and a depreciating currency.
“In Ghana, the S&P Global Purchasing Managers Index (PMI) dropped from 48.8 in July to 45.9 in August 2022—the lowest reading in 28 months. The subdued level of the PMI reflects private sector weakness—with activity being held back for seven straight months.”
“New orders and output have been trending down for many months. Rising input costs, on the back of high fuel and raw material prices, compelled businesses to cut workers for the first time in about a year”, it explained.
World Bank affirmed 5.5% expansion of Ghana’s economy in 2022
The World Bank earlier in the year affirmed its projection of 5.5% expansion of Ghana’s economy in 2022.
It however raised concern again about the rising debt, which it described could erode gains going forward.
Growth to slow to 3.3% in Sub-Saharan Africa
Meanwhile, the Africa Pulse Report said growth of the regional economy is expected to slow to 3.3%, from 4.1% in 2021, a downward revision of 0.3 percentage point from the April 2022 Africa’s Pulse forecast.
“Economic growth continues to be supported by high commodity prices, global trade, and domestic demand. Note that the downward revision from the April Africa’s Pulse forecast is on the back of multiple shocks affecting the economy, which include the conflict in Ukraine, rising food and fuel prices, elevated public debt, and the slowing down of the global economy”.
According to the report, the regional growth is due to the strong performance of the service sector and moderate contributions from the industrial and agriculture sectors.
Nigeria’s annual growth rate has slowed down from 3.6% in the first quarter of 2022 to 3.4% during the second quarter of the year.
In addition, the growth of South Africa’s economy slowed to 0.2% year-on-year in the second quarter of 2022, from 2.7% in the previous quarter.