September 18, 2020/United Capital Report
Earlier in the week, Ghana Statistical Service published the country’s GDP report for Q2-2020. According to the report, the Ghanaian economy contracted for the first time since Q2-2016 amid the negative impacts of the COVID-19 induced global lockdowns as well as declines in key export commodity prices. Specifically, the country’s real GDP dipped 3.2% y/y in Q2-2020 (vs. +5.7% and +4.9% in Q2-2019 and Q1-2020, respectively).
Although the performance compares favourably to recent numbers seen in South Africa (-17.1% y/y) and Nigeria (-6.1% y/y), the sweet spots or the resilient sectors remain the same across the respective economies. Like in Nigeria and South Africa, the Ghanaian Agriculture sector stayed resilient in Q2-2020, up 2.5% y/y while the Services and Industrial sector which contributes more than 80.0% to Ghana’s real GDP, dipped 2.6% and 5.7% respectively. Notably, the Information & Communication industry within the Services sector, recorded the sharpest growth during the period, up 74.2% y/y as the implementation of lockdown accelerated the adoption of technology across sectors. Meanwhile, Hotel & Restaurants recorded the steepest contraction during the period, down 79.4% amid lockdown.
Looking ahead, Ghana remains one of the few African countries we are tracking to record economic growth by Q4-2020, under a base-case scenario. This is as the government has gradually eased lockdown measures since May-2020. Additionally, the latest PMI data from the region suggests that economic activity has stabilized since June-2020 and is on the path of recovery.
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