Ghana’s economy in the second quarter of the year expanded at the fastest pace in five years dating back to the second quarter of 2019 beating expectation by analysts and economists.

The country’s Gross Domestic Product (GDP) in Q2 grew by 6.9% compared to 4.7% in the preceding quarter of the year according to the government’s Statistician, Kobina Annim.

He said, “The 6.9% growth rate is highest since the second quarter of 2019 and it was driven largely by strong expansion in the extractive sector, just as we saw in the second quarter of 2019,” 

Growth across major sectors

The industrial sector experienced a significant annual growth of 9.3% in the period, following a 6.8% expansion in the first quarter. Meanwhile, growth in the agriculture and services sectors quickened to 5.4% and 5.8% respectively, up from the previously revised figures of 4.7% and 3.2%.

Despite a challenging environment in the cocoa subsector, which saw a contraction of 26.2% for the fourth consecutive quarter, the overall agricultural sector performed well.

The sector employs an estimated 40% of the workforce. Ghana, the world’s second-largest cocoa producer, has faced production declines due to adverse weather conditions, disease, input shortages, and cocoa bean smuggling.

Sector contribution and debt restructuring effort  
The Services sector remained the largest contributor to growth in the second quarter of 2024, accounting for 44.2%. This was followed by the industry sector, which contributed 32.2%, and the Agriculture sector, with a 23.6% share.

Ghana’s economic rebound provides further momentum for the country as it undertakes debt restructuring. It has invited holders of approximately $13 billion in international bonds to exchange their holdings for new instruments, following a preliminary restructuring agreement with two bondholder groups.

The West African nation is emerging from an extended debt restructuring process and is now in the second year of an International Monetary Fund program, which has involved implementing stringent austerity measures.

Inflation rate and upcoming elections

In August 2024, Ghana’s annual inflation rate dropped to a 29-month low, increasing the chances of an interest rate cut when central bank policymakers meet on September 30. The inflation rate declined by 2.39%, reaching 20.4%, down from 20.9% in July.

The five-year high GDP growth rate coupled with an over two years low in inflation will come as melody to the ruling party as Ghanaians head to the poll later this year. Vice President Mahamudu Bawumia, the ruling New Patriotic Party’s presidential candidate for the upcoming December 7 election, is viewed as the underdog against opposition leader John Dramani Mahama.