ISSER launches 2021 Edition of State of Ghanaian Economy Report 

The Institute of Statistical, Social, and Economic Research (ISSER) has launched the 2021 edition of the State of the Ghana Economy Report. The Report discusses the country’s economic situation and proffers policy options for the government to consider to spur economic growth. It also highlights global economic performance and its impact on Sub-Saharan African economies. 

The Report was launched at a ceremony chaired by Mr. Edward Armah-Mensah, General Manager, Business Banking Agriculture Development Bank (ADB), on behalf of Dr. John Kofi Mensah, the Managing Director, ADB.

Presenting the report, Prof. Peter Quartey, Director of ISSER, indicated that Ghana’s Gross Domestic Product (GDP) grew by 5.4% in 2021, which was a substantial increase from the rate of 0.5% in 2020, due to the COVID pandemic. He said that the growth was higher than the 4.5% average recorded by Sub-Saharan Africa. He indicated that the Services sector, which grew at 9.4% in 2021, was the main contributor to the country's growth recovery. The Agricultural sector also registered a growth rate of 8.4%, which is slightly higher than the 7.3% rate of 2020. However, industrial growth continued to contract after declining by 0.8%.

Prof. Peter Quartey, Director of ISSER, presenting the report

Regarding Ghana’s fiscal situation, Prof. Quartey noted that the policy target was 9.5% of GDP but the outturn by the end of 2021 was 9.2%, excluding the financial and energy sector bailout. Again, he indicated that even though the country experienced a growth in revenue generation, its expenditure also grew, hence, could not minimize its budget deficit. The report showed that tax sources contributed about 80.7% to Ghana’s revenue generation in 2021. Prof. Quartey indicated that tax exemptions made up about 5.1% of the country’s revenue. He was convinced that the figure was high and expressed concerns over the failure of state agencies to establish if the interventions are value for money. 

Touching on Monetary and Financial Sector Development, Prof. Quartey expressed that COVID-19 was a major test of the resilience of the banking and finance sector following the reforms. He also said that the country's lending rate of 21% in 2021 was appreciably high when compared to rates in other African countries such as Kenya, Liberia, and Tanzania. According to him, the situation was a disincentive for investors. On the exchange rate market, he noted that the local currency performed creditably well last year after recording cumulative gains relative to the pound, euro and yen.

Reviewing Ghana’s monetary developments during the third quarter of 2022, Prof. Peter Quartey commented on the rising inflation situation. Fearing that the trend would continue, he said that the situation called for “swift policy action". He indicated that the local currency had also experienced a 37.5% depreciation but was hopeful that measures being put in place to stabilise the currency will begin to yield the needed results.

A cross-section of participants at the Launch

A chapter of the Report also looked at factors that have pushed Ghana to engage with the International Monetary Fund for financial support. Prof. Quartey said that factors such as the COVID-19 pandemic, the financial sector clean-up, the energy sector levy, and the Russian-Ukraine war have already been identified as reasons for the development. However, he was convinced that excessive spending by the government for the 2020 election had been overlooked. 

On the way forward, Prof. Quartey called for the implementation of the revised tax exemption law, and the reintroduction of road tolls using an electronic pass system. He also suggested a downward revision or scrapping of the electronic levy and a reduction in the size of the government to send a signal to the market about the country's seriousness about achieving fiscal consolidation.

A question-and-answer session was held after the presentation of the report.

Delivering the closing remarks, Mr. Edward Armah-Mensah said that the task needed to revive the economy was huge but was quick to add that it was achievable. He called on the government to consider controlling public expenditure and properly structuring the country’s debt. He also urged Ghanaians to consider contributing more towards the strengthening of the economy. 

A group photo after the Launch of the report

The launch was attended by policymakers, civil society organisations, members of the University community, journalists and students.