By Kofi AHOVI
The rebasing of Ghana’s economy in November, last year, has resulted in increases in the country’s Gross Domestic Product (GDP) growth rate to 7.7% for 2010, 1.1% more than the estimated 6.5% for the year prior to the rebasing.
This is the second upward revision of the GDP growth rate for 2010, the original estimate based on the year up to September 2010 and announced in the 2011 budget was 5.9%.
According to the revised GDP figures released by the Ghana Statistical Services last week, the economy in 2010 outpaced the final growth estimate of 4% in 2009 by 3.7 percentage points. In real terms the GDP estimate stood at GH¢24.187 billion up from GH¢22.454 billion in 2009.
Ghana's GDP increased significantly, after a statistical re-basing of the economy to capture new sectors, such as oil exploration, forestation and telecommunications, and moving the country into the middle income bracket. The re-based index of the economy saw the base year changed to 2006 instead of 1993.
Rebasing of national accounts series means replacing the old base year used for compiling the constant price estimates to a new and more recent base year. The new series placed Ghana as the third largest in ranking of GDP per person in the ECOWAS sub-region behind Cape Verde and Nigeria, and 21st in Africa.
The growth in GDP was mainly driven by the services sector, which rose by 9.8% in 2010 on the back of Information and Communication Technology sub-sector, which recorded the highest growth of 24.5%, business and other service activities contributed 23.1% and the banking and insurance went up by 16.7%.
Instructively, ICT activities were not used significantly in computing Ghana’s GDP and therefore its growth rate, prior to the rebasing.
However, as at the end of September 2010, the services sector grew by 6.1% and contributed 32.8% as its share to GDP, displacing the agriculture sector as the highest contributor to GDP. Post rebasing the growth recorded is now 9.8%, 3.7 percentage points above the September 2010 figure.
Dr. Grace Bediako, Government Statistician, who launched the document last week in Accra, said increase in consultancy, legal, brokerage, and other business services, communication services, wholesale and retail trade which grew by 17% and 14% respectively were some of the reasons for the growth of the services sector.
The agriculture sector recorded growth of 5.3% over the output of 2009 with all sub-sectors contributing positively to the increase. The crops subsector increased by 5% in 2010 compared to 10.2% a year earlier, fishing in value terms grew by 1.5% after recording negative growth of 5.7% in 2009. Forestry, logging and related activities rose by 10.1%, while livestock grew by 4.6% in value terms. However, by September 2010 the growth recorded in the agriculture sector was 4.8%, 50 basis points below the current figure.
Also the growth recorded for the industry sector as at September 2010 was 7.0%. However, after rebasing, growth in the industry sector for 2010 is 5.6%. This, nevertheless, compares favourably with 4.5% in recorded in 2009. Mining and quarrying grew by 7.6% while manufacturing recovered from a negative growth of 1.3% in 2009 to register a rate of 7.6% in 2010. Electricity grew by 12.3%, representing the highest growth in the sector, while construction went up by 2.5%, the lowest in the sector for 2010.