COVID-19: Ghana records 10.6% y/y decline in economic activity in May

Ghana has seen a significant decline in economic activity amidst the COVID-19 pandemic, with data showing a staggering 10.6% year-on-year drop in May. This comes as the country's central bank, the Bank of Ghana, prepares for its Monetary Policy Committee rate decision. The economic activity indicator released by the bank is painting a grim picture of the country's economy, reflecting the widespread impact of the global health crisis. Ridle Markus, Africa Strategist at Absa Corporate and Investment Banking, joined CNBC Africa to discuss these recent developments. Despite the decline, Markus highlighted a rebound in consumer and business confidence levels from the sharp drops experienced in April. This indicates some resilience in the face of economic challenges, though the road to recovery may still be long and arduous. One of the key factors contributing to Ghana's economic downturn is the disruption caused by the pandemic. The closure of businesses, restrictions on movement, and a slowdown in global trade have all played a role in the sharp decline in economic activity. Markus emphasized the importance of monitoring these indicators closely to gauge the country's economic trajectory in the coming months. While the situation remains challenging, there are some signs of hope. Markus pointed out that both consumer and business confidence levels have shown improvement, suggesting a degree of optimism among Ghanaians. This positive sentiment could be a driving force in propelling the economy towards recovery. As Ghana grapples with the economic fallout from the pandemic, policymakers and businesses alike are faced with tough decisions on how to navigate these uncertain times. The Monetary Policy Committee's rate decision will be closely watched as stakeholders look for guidance on the path forward. The government's response in terms of fiscal stimulus and support for the hardest-hit sectors will also be crucial in determining the country's economic resilience in the face of the ongoing crisis. In conclusion, Ghana's economic landscape is experiencing significant challenges due to the impact of the COVID-19 pandemic. While the recent data paints a gloomy picture of the country's economic health, there are glimpses of hope in the form of improving confidence levels. The road to recovery may be long, but with strategic planning and effective policy interventions, Ghana can chart a path towards economic stability and growth.