New numbers: GDP expansion, ports activity and mobile money in Ghana

JANUARY GDP EXPANSION - 13.9% IN ANNUALISED TERMS

According to Bank of Ghana (BoG) data published on 22 March, the Composite Index of Economic Activity showed 13.9% growth in January 2021.

This would be the fastest outturn in more than a year. Construction, imports, industrial power consumption, airport arrivals and port activity were among the largest contributors to growth in the

period. The January 2021 outturn is particularly welcome news given that the government’s main strategy for managing the public debt situation appears to be growth. However, worryingly, in the March 2021 Monetary Policy Committee press release, business and consumer confidence were described as ‘softening’ on the back of COVID-19 and anticipated restrictions.

Meanwhile, at 10.3% in February, headline inflation is back outside the target range of 8% plus or minus 2%, and the policy rate was maintained at 14.5%. See here for the Bank of Ghana Monetary Policy Committee Press Release.

MOBILE MONEY TRANSACTIONS GROW IN VALUE

The total value of mobile money transactions in Ghana grew from GHS 30.1 billion (USD5.3 billion) to GHS 67.9 billion (USD11.8 billion) between February 2020 and February 2021, according to the Summary of Economic and Financial Data released by the Bank of Ghana this month.

Over the same period, the number of transactions grew from 193 million to 295 million per month - notwithstanding a drop of 6 million between Jan and Feb 2021.

Evidently, Hemmingway was right, things change “gradually and then suddenly”, only for Ghana’s mobile money sector, gradually has actually been a rapid thing. For example, between 2014 and 2017 alone, the number of Ghanaians above 15 years of age with a mobile money account jumped from 13% to 39% according to the World Bank estimates. Since then, broad-based usage, growing mobile money service interoperability and the pandemic most recently appear to have facilitated further transformation.

A TALE OF TWO PORTS

Ghana is a trading nation. Imports and exports are equivalent to around 70% of GDP in normal times. For those flows, the two commercial ports in Tema and Takoradi are the major points of entry and exit.

According to data released by the Ghana Ports and Harbours Authority, 26.4 million tonnes of cargo traffic moved through the two ports in 2020. This is an almost 5% fall from 2019, unsurprising given the economic downturn. Real GDP growth fell from 6.5% in 2019 to 0.9% in 2020.

However, at least two things are worth noting. The 2020 figure is still above historic averages and it disguises an increase in traffic through Tema – from 17.3 million to 18.9 million tonnes, and a decrease in traffic through Takoradi from 10.4 million to 7.5 million tonnes.