Ghana’s Economic Growth Declines Amidst Cocoa Sector Challenges

Ghana’s economic growth slowed to 3.6% in Q4 2024, down from 7.2% in Q3. Industrial activity stunted at 0.2%, while cocoa output fell 21.4%. This downturn presents challenges for President John Mahama’s administration amidst an economic recovery plan following a debt default and IMF intervention.

Ghana’s economic growth slowed significantly in the fourth quarter of 2024, marking its slowest expansion in over a year. During this period, the Gross Domestic Product (GDP) increased by 3.6%, a notable decrease from 7.2% in the previous quarter, as reported by Government Statistician Samuel Kobina Annim. Industrial growth nearly stagnated at just 0.2%, following a robust 10.4% increase in the third quarter.

In the agriculture sector, which employs approximately 40% of the workforce, growth was recorded at 2.9%, a slight decline from 3.2% in the third quarter. A critical point of concern is the cocoa sector, where output experienced a drastic plunge of 21.4%, marking its sixth consecutive quarter of decline. This downturn in cocoa production is particularly alarming given its significance to both the economy and employment conditions.

This economic slowdown poses significant challenges for President John Mahama’s administration, which has pledged to revitalize the economy following a debt default in 2022 and subsequent International Monetary Fund (IMF) assistance. As part of this effort, Finance Minister Cassiel Ato Forson is scheduled to present the government’s first budget on Tuesday, focusing on measures to stimulate growth.

Ghana, recognized as the second-largest cocoa producer globally, is facing multiple issues including adverse weather conditions, crop diseases, and the challenge of cross-border smuggling that negatively impacts domestic prices for cocoa beans, which are valued higher in foreign markets. These factors contribute to the difficulties in reversing the decline of this vital sector.

In summary, Ghana’s economy is experiencing significant slowdowns, particularly in the cocoa sector, which has seen persistent contraction. This development raises concerns for the government under President John Mahama, especially as it prepares to address these economic challenges through upcoming financial policies. The pressures from both agricultural productivity and external market dynamics necessitate strategic responses to revitalize growth in the nation.

Original Source: techlabari.com