Some Economists have projected that Ghana will end this year with 6 percent economic growth, down from the government’s 6.3 percent target.
According to an Economist for Global Markets at Stanbic Bank, Ayomide Mejabi, the projected growth will also be influenced by increased activities in the oil sector other than the increased business and consumer responses in the non-oil sector.
He also argues that the increased oil production influenced the target for this year’s economic growth which is about twice the figure recorded in 2016.
“In our view we are broadly aligned with government when it comes to the growth projections. The main difference is that we suspect that growth this year will be more driven by the new oil in TEN fields rather than by increased business and consumer sentiments from the non oil sector,” he explained.
Though Mr. Mejabi admitted that the potential cut in operations on the Jubilee Oil fields may affect projected growth, he maintained that the potential increase in oil production by some 30,000 barrels favoured by relatively increased prices should propel growth in oil exporting countries like Ghana.
He further explained to Citi Business News that the government’s pro business policies should spur it on to achieve set targets within the medium to long term.
In his budget presentation in March this year, Finance Minister Ken Ofori Atta stated that growth remained subdued in 2016.
GDP, based on the provisional outturn for the first three quarters of the year, was estimated at 3.6 percent, with the non-oil real GDP estimated at 4.6 percent, same as target.
Among the sectors however, the industry sector, specifically, mining and quarrying underperformed due to a contraction in upstream petroleum output, which constitutes the bulk of the Mining and Quarrying subsector.
Also all the subsectors in the Agriculture Sector, however, recorded positive growth rates.
The Services Sector continues to dominate the sectors with a share of 54.3 percent in 2016.
“That is a credible plan by the government and we expect a possible implementation of the plan. But we suspect that it takes a while for those policies to have an impact on the economy.”
Ayomide Mejabi made the remarks at the sidelines of Stanbic bank’s capacity program for businesses on recent forex developments.
The primary aim of the program is to equip businesses and forex dealers of financial institutions to possible opt for hedging of their demand for forex.
The move comes on the heels of recent depreciation on some markets such as Ghana and South Africa which have affected the performances of the currencies of the respective countries.
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By: Pius Amihere Eduku/citibusinessnews.com/Ghana
Economist for Global Markets at Stanbic Bank, Ayomide Mejabi