Ghana’s economy slows marginally to 3.1% in first quarter

Ghana's economic growth slowed marginally to 3.1% in the first quarter of 2021, compared with the 3.3% growth recorded in the fourth quarter of 2020. Courage Kingsley Martey, a Senior Economist at Databank, highlighted that the impact of the second wave of COVID-19 infections in the country, coupled with ongoing restrictions and sluggish investment in sectors like hospitality and oil and gas, contributed to the subdued growth momentum. The agriculture sector managed to stay afloat with a 4.3% growth, while services and the industrial sector saw modest increases of 4% and 1.3% respectively. Despite these challenges, the government of Ghana remains optimistic about the economic outlook, with projections aligning with the IMF's forecast of 4.6% growth for the year. To boost growth, the government has launched the Ghana CARES program, focusing on investing in key sectors such as agriculture, ICT, manufacturing, and financial services. This initiative aims to revive growth through public investments and support for small businesses, with a target of creating 25,000 jobs in the manufacturing sector over the medium term. However, financing remains a key concern, with the government facing pressure from budget deficits and mounting debt levels. The balancing act of managing spending, taxes, and debt will be crucial for sustaining economic recovery in Ghana.