Can Ghana sustain growth momentum?

Ghana's economy showed promising signs of growth in the last quarter of 2022, despite facing significant challenges such as high inflation, a debt-payment moratorium, and rising interest rates. According to Yomi Mayomi-Akinola, the Head of Research Division at Sarpong Capital, Ghana's GDP figures have been relatively positive, with a 3.1 per cent full-year performance and a noticeable improvement in the fourth quarter. While the numbers are encouraging, there are still concerns about whether they are enough to boost overall sentiments and sustain the growth momentum. Mayomi-Akinola pointed out that Ghana ranked fifth in terms of GDP growth across the continent, which is a positive indicator for the investing community. However, he emphasized the importance of waiting to see the outcome of the IMF deal and the implementation of effective policies by the Ghanaian government to address the economic challenges. The ongoing debt talks with China and Germany, as well as the optimism surrounding the IMF deal outcome expected by May, are seen as steps in the right direction. Despite the IMF projecting a conservative GDP growth rate of 1.6 per cent for Ghana, Mayomi-Akinola expressed confidence that the country could achieve growth rates higher than 2 per cent. He highlighted key sectors such as communications and technology, mining, agriculture, healthcare, and education as driving forces behind Ghana's GDP performance. The services sector, particularly the ICT telecom segment, has shown significant growth and is expected to sustain the economy in the near term. Another critical aspect of Ghana's economic outlook is the performance of the Ghanaian CD. The currency experienced volatility in the first quarter of the year, rebounding initially before depreciating again. Mayomi-Akinola suggested that the CD's value could appreciate once the IMF deal is finalized but expects the exchange rate to remain around 13-14 compared to the numbers seen in 2022. However, he acknowledged that the depreciation of the CD could have an impact on business sentiments and GDP growth. In terms of inflation, there has been a noticeable slowdown, and Mayomi-Akinola projected a further decline throughout the year. He emphasized the need for a combination of monetary and fiscal policies to effectively address inflation and drive economic stability. Regarding the debt management strategies, Mayomi-Akinola discussed the domestic debt exchange program and ongoing conversations with pension fund organizations. He clarified that the government is actively working to restructure the remaining debt to alleviate concerns raised by pensioner bondholders. Looking ahead to the second quarter, he highlighted the importance of continued dialogue with stakeholders to ensure a sustainable debt management approach. Overall, Ghana's economic outlook remains hopeful, with key sectors driving growth and ongoing efforts to address economic challenges and maintain stability.