Ghana’s economy appears to be much bigger than the $16 billion that was earlier estimated.
Though the Head of Economics and Statistics at the Ghana Statistical Service (GSS), Magnus Ebo Duncan, will not reveal the actual size of the economy as the review of the national economic output would be released next month, BUSINESS GUIDE learnt that the country’s economy has a size of between $25-35 billion.
The review of the national economic output would consider the years 2006, 2007, 2008 and 2009 and as well capture activities currently excluded from the official data including funeral costs, cash dispenser user charges, air travel and private education.
According to him, everything has almost been completed but some experts are still reviewing the methodology among others.
“Generally I don’t know a country that has re-based its national account that there is no increase”.
Last year the country’s economy size in provisional terms was a little over $21 billion in current Gross Domestic Product (GDP) but the review which will take into account the 2006 base year for prices, would give a bigger figure of the economy.
“The picture points out that there is an increase in the size of the economy. Look at the number of roads that are asphalted, vehicles on the roads, the significant growth in the telecommunication sector and the banking sector”, he emphasized.
He explained that there have been shifts in the sectoral contribution and some activities which were unimportant have now been considered.
“The basket will be increased to include the informal sector and others as well,” said Asuo Afram, Head of Pricing at the GSS.
Importantly, Ghana’s economy saw significant growth in the last five years where there were increases in the number of banks, insurance firms, telecommunication companies, reduction in the poverty rate from about 35 percent in 2002 to 28.5 percent in 2005 among many others.
The re-sizing of the $16-billion-a-year Ghanaian economy, which will benefit from oil revenues from the huge Jubilee Oil Field by December this year, is expected to include two components that could potentially inflate the GDP level.
Analysts argued that a bigger GDP would mean Ghana’s fiscal deficit was not as large as feared and perhaps, did not require the high dosage of austerity measures prescribed.
World Bank Country Representative, Dr. Ishac Diwan had earlier told Reuters that the move to review the economy would prompt many to reassess their view of the Ghanaian economy, already one of the largest in West Africa and one of the few to have launched a Eurobond. The $750 million bond was launched in September 2007.
South Africa, a middle-income country, in 2007 was ranked the biggest economy in Africa with a size of $467.6 billion, followed by Egypt with $431.9 billion.
Nigeria, an oil producing country; Algeria, also oil producing country and Morocco followed suit with economy sizes of $294.8 billion, $268.9 billion and $127 billion respectively.
Sudan, Angola, Libya, Tunisia and Kenya were ranked 6th, 7th, 8th, 9th and 10th respectively with economy sizes of $107.8, $80.95, $78.79, $77.16 and $57.65 billion.
Ghana with its rich natural resources such as minerals and cocoa, was among the top 20 on the continent. Its provisional growth rate estimates for last year was 4.7 percent, a drop from the previous 7.3 percent.
Meanwhile, the quarterly GDP rate of the country will be released alongside the size of the economy.
Source: Business Guide