A rebased GDP calculation places Ghana firmly within lower-middle-income-country status but, as Eric Kwame reports, the country still has some way to go before its tremendous potential can be fully realised.
Ghana’s economy is a diversified one, which, like most developing economies, is subject to the ebbs and flows of the global economy.
Tagged as one of the emerging markets, the country’s economy is based mainly on the services sector, agriculture, mining, manufacturing and, lately, oil.
For close to a decade now, the economy has been doing appreciably well, achieving the enviable feat as the fastest-growing economy in the world in 2012.
In the past, the nation’s economy has been a raw-material-driven one with exports of agricultural products such as cocoa and minerals such as gold being the mainstay of the country’s economy. However, since the discovery and subsequent production of oil in 2010, oil revenues and the services sector have taken over, with the latter contributing more than 50% to the nation’s GDP, which currently stands at $90.882bn (2013 estimate in Purchasing Power Parity terms).
Despite the fact that the country is well endowed with natural resources, which should have made the manufacturing sector a very vibrant and strong contributor to the nation’s economy, that sector remains weak due to a host of factors.
This has also resulted in the country being heavily dependent on imports of finished products to feed the demands of its industries and the people. This, besides inhibiting the growth of local industries, has also had a telling effect on the local currency, the cedi, which is currently struggling against the country’s major foreign trading currencies, the US dollar, the pound sterling and the euro.