BoG: 2021 GDP Was 5.4%

The Bank of Ghana (BoG) has said Ghana’s real Gross Domestic Product (GDP) grew at an estimated percentage of 5.4% compared to low growth in 2020.

This was contained in the published annual report and financial statement of the Central Bank.

In 2020, Ghana recorded a GDP growth of 0.5 per cent.

BoG attributed the 2021 growth to the Services and Agriculture sectors, which grew by 9.4 per cent and 8.4 per cent, respectively.

“Industry, however, contracted by 0.8 per cent. In terms of contribution to GDP, Services dominated with 48.9 per cent share, compared to 48.1 per cent in 2020. It was followed by Industry with a 30.1 per cent share, compared to 30.8 per cent in 2020. The share of Agriculture improved to 21.0 per cent, compared to 20.1 per cent in 2020.”

Fiscal Outturn
The Government’s Expenditure for the year 2021 amounted to GH¢109.3 billion (23.8% of GDP), which the BoG says was below the target of GH¢110.1 billion (25.0% of GDP).

Government budgetary operations in 2021 recorded an overall deficit of 9.2 per cent of GDP, compared to 11.7 per cent in 2020, and lower than the target of 9.4 per cent.

The BOG noted that the deficit was financed from both domestic and foreign sources with a total Government Revenue and Grants amounting to GH¢70.1 billion (15.3% of GDP), lower than the target of GH¢72.5 billion (16.5% of GDP).

“The major components were Tax Revenue of GH¢56.5 billion (80.7% of Total Receipts), Non-Tax Revenue of GH¢7.9 billion (11.3% of Total Receipts) and Grants of GH¢1.2 billion (1.7 % of Total Receipts)”, the report noted and added that Recurrent Expenditure was 84.4 per cent of Total Payments while Capital Expenditure constituted 15.5 per cent of the total.”

Domestic Debt
The report from the Central Bank also stated that the stock of domestic debt at the end of December 2021 was GH¢181.8 billion (39.6% of GDP) compared to GH¢149.8 billion (38.2% of GDP) at the end of December 2020.

It said that the increase in the domestic debt stock in the review period was a result of GH¢24.7 billion, and GH¢1.3 billion increases in the medium and long-term securities, respectively, as well as an increase of GH¢5.8 billion in the short-term securities.

The total domestic debt stock stood at GH¢351.8 billion at the end of December 2021 (76.6% of GDP), higher than the stock of GH¢291.6 billion at the end of December 2020 (74.4% of GDP), the report said.

External Debt
At the end of December 2021, the stock of external debt stood at US$28.34 billion, compared to US$24.72 billion at the end of December 2020, representing 37.0 per cent of GDP.

“The share of external debt at end-December 2021 by creditor categories were as follows: International capital market, 46.3 per cent; multilateral holders, 28.9 per cent; commercial creditors, 11.0 per cent; other concessional 5.6 per cent; bilateral holders, 4.7 per cent; and export credit agencies, 3.5 per cent”.

Foreign Exchange
The Central bank of Ghana added that the cedi cumulatively depreciated by 4.1 per cent against the US dollar in 2021, compared to 3.9 per cent in 2020.

Similarly, it depreciated against the British pound by 3.1 per cent in 2021, compared to 7.1 per cent in the previous year.

Against the euro, the Ghana cedi appreciated by 3.5 per cent in 2021, compared to a depreciation of 12.1 per cent in 2020.

“The relative stability of the Ghana cedi in 2021 was as a result of strong reserve position, which enabled the Bank to effectively support seasonal demand for foreign exchange to smoothen excessive volatilities in the currency markets.

“Also, the inflows from the US$3.0 billion Eurobond issuance and the US$1.0 billion IMF SDR allocation, as well as the Bank’s enhanced forward forex auctions, provided assurances to the market and helped contain demand pressures.”

Source: opemsuo.com/Hajara Fuseini