Researchers at Standard Bank, parent company of Stanbic Bank Ghana, have forecast a GDP growth of 4.3% for Ghana by year-end. This comes after Q2 GDP underwhelmed expectations, coming in at 3.9%. This is contained in the September 2021 edition of the African Markets Revealed (AMR) report.
“As base effects unwind further in Q3:21, to some extent we expect GDP growth will be numerically boosted for 2021. With growth coming in lower than expected in Q2:21, base effects will probably be favourable in 2022. Thus, we see GDP growth increasing to 6.4% y/y in 2022,” the report said.
With regard to Foreign Direct Investment, the researchers indicated a more cautious outlook over the coming year – given that Oil production subsided to an average of 187.4/bbl in Q1:21 from 194.8/bbl in H2:20. The ongoing delays in drilling oil wells may further weigh down oil production in H2:21.
“Indeed, the oil and gas subsector contracted by 16.2% in Q1:21, from an average contraction of 4.9% in H2:20. The mining and quarrying sub-sector, too, contracted; by an average 11.5% y/y Sep 20 to Mar 21. The gold sector’s outlook still doesn’t look promising over the coming year, after a key mine was closed due to an accident in May,” the report’s September edition indicated.
Despite the contraction in the extractive and mining sectors, Ghana’s cocoa sector is expected to perform well as external demand for cocoa has improved. Although there were earlier concerns around the Living Income Differential (LID) premium born of the Abidjan agreement with the government of Côte d’Ivoire, export of cocoa over the coming year is expected to be stable.
The report however mentioned that renewed public health restrictions remain the most notable downside risk to our growth outlook for 2021 and 2022.
The African Markets Revealed Report is a monthly report issued by the Standard Bank Group, parent company of Stanbic Bank Ghana, and focuses on the economic and financial outlook of African countries. The report also reviews current economic situations and makes short- to medium-term predictions about the economies of African countries.