Ghana’s economy contracted by an annual 3.2 percent in the second quarter of this year compared with a growth rate of 5.7 percent in Q2 2019, as lockdown restrictions that were placed to curb the coronavirus pandemic stalled activity.
At a news conference on Wednesday, Ghana’s statistician Samuel Kobina Annim explained that this is the first time in 37 years the economy has seen a contraction and is contrary to the government’s initial projection of 6.8 percent.
This is as a result of a three-week lockdown imposed in March to stop the spread of the virus, forcing many businesses to close and others witnessing a fall in output. That was mostly felt in the manufacturing and services sector, where hotels and restaurants were shuttered. “Even after the restrictions have been lifted, many businesses across sectors have continued to close down,” Kobina Annim said.
Ghana’s Central Bank data showed a contracting economy in April–May, while the private-sector PMI showed operating conditions deteriorated in the second quarter. Government revenues also took a hit, which led to a deterioration in the government’s fiscal position, as low oil prices and foreign lockdowns affected the external sector.
The economy is now expected to grow by 0.8 percent in 2020, which is down 0.3 percentage points from July’s forecast, and 4.7 percent in 2021.