Unresolved Power Crisis Will Set Ghana’s Economy Back By 3 To 5 Years – Economist

Economist Dr Adu Owusu Sarkodie says it will take Ghana three to five years to recover if authorities allow current power outages to worsen amid the COVID-19 pandemic.

Speaking to Citi Business News on Ghana’s projected economic growth for 2021, Dr Adu Sarkodie charged government to focus on resolving the ongoing power crisis along with improving the fortunes of the tourism sector to ensure it achieves its five per cent growth target for this year.

“This is an economy that is reviving. If we sit down as a country and allow this ‘dumsor’ or ‘semi-dumsor’ to crash the economy again, the effects will be so devastating that it will take between three and five years to recover. It is something that we must be serious to talk about. We saw that in the year 2015, with the years 2015 and 2016 recording negative growth rates in multiple quarters,” he said.

“We don’t’ want to experience that again. Back then, there was no COVID-19, so if we allow a similar effect of intermittent power supply to come and add to the impact of COVID-19, the overall effect on economic activities will be so devastating and the recovery will be problematic,” he added.

Struggling industry slows Ghana’s economic growth rate to 0.4 per cent in 2020

Provisional figures released by the Ghana Statistical Service show that Ghana’s economy grew by 0.4 per cent in the year 2020.

The figure which was released by the Government statistician, Professor Samuel Kobina Annim as part of a lecture at the University of Cape Coast, represents a slower growth rate than what was projected by the International Monetary Fund and the World Bank which pegged Ghana’s growth rate at 0.9 per cent and one per cent respectively for 2020.

Following the detection of the deadly coronavirus in the country the government in its 2020 mid-year budget revised the economic growth rate of the country for the year 2020 from 6.8 per cent to 0.9 per cent.

However while sharing the Gross Domestic Product figures at constant prices for 2020, Government statistician, Professor Samuel Kobina Annim indicated that the economy grew at a slower rate than anticipated.

“The provisional constant annual GDP estimate (incl. oil) for 2020 was GH₵165,992.7 million while the estimate for 2019 was GH₵165,307.6 million. This translates into a provisional annual Oil GDP growth rate of 0.4 per cent for 2020.”

On a quarter on quarter basis Professor Kobina Annim, indicated that the economy grew by 3.3 per cent in the 4th quarter of 2020 when compared with the six percent growth rate recorded in the 4th quarter of 2019. He however added that the contractions experienced in the second and third quarters were worse than originally anticipated.

“We are yet to return to the pre-COVID 19 growth rates. It is important to note that the provisional figures that were released in the 2nd and 3rd quarters of 2020 indicated that the economy contracted by 3.2 per cent and 1.1 per cent respectively. Based on finalised figures we’re now seeing a contraction of 5.9 per cent and 3.3 per cent respectively. It is also important to note that based on the provisional figures the economy grew by 4.9 per cent in the 1st quarter of 2020, but per the revised figures the economy grew by 6.8 per cent. ”