The country’s economy, per 2017 GDP estimates, is now valued at GH¢256.6billion – up from the GH¢205.9billion recorded earlier, after the Ghana Statistical Service (GSS) completed its rebasing of the economy.
The rebasing of national accounts series by the GSS means replacing the old base-year (2006) used for compiling the constant price estimates to a new and more recent base-year (2013).
The increase from GH¢205.9billion to GH¢256.6billion represents an expansion of 24.6 percent.
The 24.6 percent expansion is however relatively lower when compared with the previous years from the new base-year, 2013.
In 2013, the economy expanded by 32.4 percent and increased to 37.1 percent in 2014; then dropped to 31.7 percent in 2015 and further dropped to 28.5 percent in 2016.
Growth-wise, the economy grew by 8.1 percent after the rebasing exercise – a drop from the 8.5 percent recorded prior to the rebasing.
From a sectoral point of view, the agriculture sector grew by 6.1 percent, compared to the 8.4 percent recorded prior to the rebasing.
Industry grew by 15.7 percent compared to the 16.7 percent recorded earlier; and the services sector saw a drop from 4.3 percent to 3.3 percent after the rebasing.
In terms of contribution to GDP, the agriculture sector now contributes 21.2 percent while industry and services contribute 33.2 and 45.6 percent respectively.
However, prior to the rebasing, the three sectors’ contribution to the economy were 18.3 percent, 25.5 percent, and 56.2 percent for agriculture, industry and services respectively.
Finance Minister Ken Ofori-Atta has said that the rebasing will have a positive impact on the economy, saying it will expand the economy by 20 percent – and this is expected to bring the debt to GDP ratio down.
Reasons for rebasing
According to the Ghana Statistical Service (GSS), there are three main reasons for rebasing the country’s economy: namely methodological, structural and coverage.
“International recommendation is to ideally change the base-year every five years. The 2006 base-year that characterises the current GDP computations is 12-years old, and therefore too distant to properly describe the current economic developments.The new base year is 2013.
“New compilation methodology (SNA’ 2008) recommends the inclusion of certain activities which were not included in the earlier version (SNA’ 1993). The new classification requires more detailed data,” the GSS said.
“The economy’s structure might have changed since 2006, the reference period. That is, some activities which had little economic importance in 2006 have gained prominence now; and thereby may contribute more to the economy than before.
“And the availability of new and updated sources of information makes it necessary to rebase the economy,” the GSS said in a newsletter.