Ghana’s economy grew faster than anticipated in the first quarter, driven by the services and agricultural sectors.
Gross domestic product expanded 4.2% in the three months through March from a year earlier, compared with 3.7% growth in the previous quarter, government statistician Samuel Kobina Annim told reporters in the capital, Accra, on Wednesday. The median of four economists’ estimates in a Bloomberg survey was for growth of 2.6%.
Services grew 10.1% in the quarter, compared with 7.6% in the previous three months, driven mainly by the health and education sub-sectors. Agriculture expanded 4.8%, up from 3.6%, as cocoa output rose. Industry contracted 3.2%, after shrinking 1% contraction in the previous quarter.
The oil and gas sector, one of Ghana’s top foreign-exchange earners, contracted 16% in the quarter, Annim said.
The cedi was little changed at 11.3375 per dollar at 10:30 a.m. in Accra, while the yield on Ghana’s dollar bonds maturing in 2032 declined 15 basis points to 24.4%.
The International Monetary Fund’s approval of a $3 billion extended credit facility for Ghana, with an immediate $600 million disbursement, should help bolster growth in subsequent quarters. The West African nation sought the bailout to replenish its coffers that were depleted by years of overspending and the fallout from the coronavirus pandemic and Russia’s invasion of Ukraine.
Ghana embarked on a debt restructuring in December to qualify for the IMF program. The government, which has restructured 87.8 billion cedis ($7.7 billion) of domestic debt, is now readying for “very hard” talks with eurobond holders in the coming months, Finance Minister Ken Ofori-Atta said Sunday. Ghana halted payments on most of its external debt in December.
The IMF program will help to restore investor confidence in the economy and sends a positive message to Ghana’s trading partners and creditors, President Nana Akufo-Addo said last month.
(Updates with growth breakdown from third paragraph)
