Ghana Economy Downshifts in Fourth Quarter as Cocoa Shrinks
GDP grew 3.6% in fourth quarter y/y versus 7.2% prior period
Cocoa contracted 21.4%, shrinking for sixth straight quarter
Ghana’s economy grew at the slowest pace in more than a year in the fourth quarter, as industrial activity almost stalled and the cocoa sector shrank again.
Gross domestic product expanded 3.6% in the three months through December from a year earlier, compared with a 7.2% increase in the prior quarter, Government Statistician Samuel Kobina Annim told reporters in the capital, Accra, on Monday.
The data will be closely watched by the government of President John Mahama, who won December elections on the campaign pledge to reset an economy struggling after a 2022 debt default and International Monetary Fund bailout. Finance Minister Cassiel Ato Forson will present the government’s first budget on Tuesday.
Read more: Slight Easing in Ghana Inflation Puts Rate Cut in Focus
Ghana’s dollar bonds maturing in 2035 were among the worst performers in frontier and emerging markets on Monday, losing 0.5% to 72.18 cents on the dollar at 12:30 p.m. in London.
The industrial sector grew by just 0.2% in the period after expanding a revised 10.7% in the third quarter. Agriculture, which employs an estimated 40% of the West African nation’s workforce, expanded by 2.9% from a revised 2.5% in the prior quarter with cocoa shrinking by 21.4%.
It was the sixth consecutive quarter that cocoa has contracted, reflecting a range of headwinds for the world’s second-largest grower including bad weather, crop disease and smuggling beans over the nation’s borders, where they command a higher price.
The services sector expanded 6.3% from a slightly stronger estimate of 6.5% in the third quarter, Annim said.
This story originally appeared in Bloomberg