Ghana’s economy is expected to experience a significant boost, with growth forecasted to rise from 2.9 percent in 2023 to a three-year high of 5.5 percent in 2024, according to Fitch Solutions.
Economist Peter Terkper attributes this upward revision to the stronger-than-expected performance in the first two quarters of 2024. The service and industrial sectors, particularly mining and quarrying, are driving this growth. However, concerns remain over the slow pace of expansion in the manufacturing sector.
Despite these concerns, Terkper believes that the 5.5 percent growth target is achievable if current trends continue. “The strong performance in the first two quarters is a good indicator of the economy’s potential,” he noted.
The recent utility tariff hikes have been attributed to the persistent depreciation of the cedi and high inflation, despite a slight drop in the latter. The Public Utilities Regulatory Commission (PURC) uses a quarterly review mechanism to adjust tariffs based on these economic factors.
Mr. Terkper warned that as long as the cedi remains weak and inflation stays above 20%, increases in utility prices are inevitable. This will negatively impact businesses, particularly the manufacturing sector, as electricity and water are essential expenditure lines.
“The manufacturing sector will bear the brunt of increased utility prices,” Terkper cautioned. “It’s crucial for policymakers to address these underlying economic challenges to sustain growth.”
As Ghana’s economy continues to navigate these challenges, the 5.5 percent growth target remains a beacon of hope for a brighter economic future.
Ruth Abla ADJORLOLO
