GDP growth will increase by 4.7% in the first quarter of 2024; driven by the mining and technology sectors

In the first quarter of 2024, the economy grew by 4.7%. Every year

According to provisional data from the Ghana Statistical Service (GSS), the economy grew by 4.7% year-on-year in the first quarter of 2024, significantly outpacing the 3.8% growth recorded in the same period last year.

These results highlighted the resilience and dynamism of key sectors, positioning the country on a path to sustained economic recovery.

On a seasonally adjusted basis, inflation-adjusted GDP increased by 1.2% compared to the fourth quarter of 2023 – based on quarter-on-quarter growth of 1% in the previous period. This continued expansion signals sustained economic momentum, driven by strategic sector performance.

Key sector contribution

The mining and quarrying sector proved to be extremely competitive, registering an incredible 12.9% growth. The recovery of this sector also reflects the increase in global raw material prices. Meanwhile, the information and communications sector, key to the digital transformation agenda, grew 17.9 percent, highlighting solid investment by key players and increased consumer demand for digital services.

Agriculture, especially the crops sub-sector, grew by 4.3 percent, while the construction sector also showed solid growth, growing by 8.2 percent, highlighting ongoing infrastructure projects and increased capital expenditure. The accommodation and food services sector rebounded strongly, growing by 9.4% as the hospitality industry continues to recover from the pandemic crisis.

Areas of shrinkage

Despite the overall positive economic tone, several sectors experienced declines. The health sector shrank by 8.8 percent, raising concerns about underlying challenges in the delivery and financing of health care. The electricity sector’s woes are illustrated by a 7.5% decline.

The Public Administration and Education sectors also shrank – by 5.3% respectively. and 4.9 percent, suggesting possible budget constraints and operational efficiency.

The remaining personal services and forestry and logging sectors saw marginal declines of 2.9% and 1.2%, respectively.

These contractions highlight the uneven recovery across different segments of the economy and the need for targeted policy interventions.

Nominal GDP information

Nominal GDP at current prices reached GH¢266.7 billion in Q1 2024, a significant increase from GH¢212.1 billion in Q1 2023. The services sector maintained its dominance, contributing 45.6% of GDP, which emphasizes its key role in economic activity. The industrial sector, driven by mining and construction, contributed 30.6%, while agriculture contributed 23.8%.

Prospects and policy implications

Analysts say the growth figures reflect recovering economic fundamentals and effective policy measures. However, contractions in key sectors such as health and electricity underscore the need for strategic interventions. Policymakers may need to focus on increasing healthcare financing, tackling energy supply issues and improving public sector efficiency to sustain inclusive growth.

As the country continues on the path to economic recovery, they say the focus will likely continue to be on improving sector performance while addressing structural weaknesses. Further investment in digital infrastructure, mining and construction will be key, along with targeted support for lagging sectors.

The rest of the economic outlook for 2024 appears optimistic, provided the government is able to effectively manage sectoral disparities and maintain growth momentum.