Ghana's economy now bigger,....……worth US$31bn

Ghana has joined the world ranking of middle-income bracket countries, a rebased index of the economy has revealed.

By raising the annual per capita income above the US$1,000 mark, Ghana leaves the Bretton Woods low–income bracket of countries to join the affluent league of countries like Cote’d’Ivoire. This also means that Ghana no longer qualifies for concessionary loans.

According to the index, whose base year is now 2006 instead of 1993, Ghana’s economy will grow by 6.6 percent this year. Government Statistician Dr. Grace Bediako told journalists in Accra on Friday that there has been a significant change in the size of the economy due to the rebasing of the national accounts to capture the realities of the current period.

With 2006 as the new base year, the rebased economy has grown by 60 percent, while the provisional estimate puts per capita Gross Domestic Product (GDP) at US$1,318.36, against the existing estimate of US$753.

The new series places Ghana as the third-largest in ranking of GDP per person in the sub-region – after Cape Verde and Nigeria – and the 21st in Africa.

The services sector has overtaken agriculture - the one-time leader - and now accounts for 51 percent of the economy, while agriculture now accounts for 30.2 percent and the industrial sector, 18.6 percent.

The services sector in 2009 accounted for 49.5% of GDP, with agriculture registering 31.7% while the industrial sector attained 18.6 percent during the period.

The figures released disclose that the provisional GDP estimate for 2010 is valued at GH¢44,798.7million, an increase over the estimated figure of GH¢37,231million for 2009. This translates into a 2010 GDP estimate of about US$31billion.

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 measure reflects growth in areas such as banking and telecommunications, which were fully captured in the rate.

Policy think-tank Centre for Policy Analysis (CEPA), however, contends that the rebasing of the national accounts, which makes Ghana a middle-income country immediately, could have some negative effects on the economy - citing the introduction of new taxes, while existing taxes are more likely to be increased.

The country’s economy had been growing consistently upward over the last decade until 2009 when it slumped to 4.1 percent. From a growth rate of 3.7 percent in 2000, it shot up to 4.2 percent and 4.5 percent in 2000 and 2001, before hitting 4.5 and 5.2 percent in 2002 and 2003 respectively. It hit a record high of 7.3 percent in 2008.

South Africa, which attained middle-income status in 2007, is ranked the biggest economy in Africa with a size of US$467.6billion, followed by Egypt with USS$431.9billion.

Nigeria and Algeria, two oil-producing countries, and Morocco follow suit with economic sizes of US$294.8 billion, US$268.9 billion and US$127 billion respectively.

Sudan, Angola, Libya, Tunisia and Kenya are ranked 6th, 7th, 8th, 9th and 10th respectively with respective economic sizes of US$107.8billion, US$80.95billion, US$78.79 billion, US$77.16billion and US$57.65billion.