Q1 GDP growth: Focus on real not nominal growth — Experts

Q1 GDP growth: Focus on real not nominal growth — Experts

Two financial experts say the nominal Gross Domestic Product (GDP) growth of 4.7 GDP recorded in the first quarter of this year is not a true reflection of the reality on the ground.


The two, Prof. Bokpin and Dr Richmond Atuahene, were of the view that any growth in the GDP must reflect in the growth of the lifestyles of the ordinary Ghanaian positively.

They contend that the current inflationary pressures and depreciation of the cedi are the determinants of the real economy of most Ghanaians.

In separate interviews with the Graphic Business, Prof. Bokpin said: “How has this new growth improved food prices? How has it narrowed the inequality? How has it impacted on the lives of the people? How is it impacting the exchange rate? And how has it reduced poverty?” 

He revealed that the economy was growing far below its potential and the government must do a lot more to record a sufficient growth to lift millions of Ghanaians out of poverty.

“The growth that you are seeing is coming at a higher cost to the average Ghanaian, how many ordinary Ghanaians can associate with this growth when they go to the market,” he stated.

He suggested that any growth in the economy must generate jobs, create opportunities and increase productivity, adding that the agricultural sector is one surest way of achieving an inclusive growth.

He advocated leveraging this new growth which he stated was from the mining and quarry sector to the real sectors such as agriculture and service sectors where majority of Ghanaians eke out their living in order to make it meaningful.

First quarter GDR

Ghana's economy grew by 4.7 per cent year-on-year in the first quarter of this year, compared to the 3.8 per cent recorded in the same period last year, the Ghana Statistical Service (GROKS) has revealed.

Mining and quarrying, information and communications as well as the crops sub-sectors witnessed enormous activities that pushed growth in productivity in the economy in the first quarter of the year over the same period last year.

Other contributors to the growth in total productivity, measured by Gross Domestic Product (GDR), for the first quarter of this year, are the construction sub-sector as well as accommodation and food service activities sub-sectors.

Provisional real quarterly gross domestic product (QOS) growth rate, including oil and gas, over a one-year cycle (year-on year), is 4.7 per cent in the first quarter of 2024. The growth rate recorded in the first quarter of 2023 was 3.8 per cent over the same period in 2022.

Highest growth

Announcing the 2024 first quarter GDP in Accra last Wednesday, the Government Statistician, Professor Samuel Kobina Annim, said industry recorded the highest growth of 6.8 per cent, followed by the agriculture sector at 4.1 per cent

“The drivers of growth were the mining and quarrying sub-sectors which contributed 1.48 per cent, followed by the information and communications sub-sectors which contributed 1.01 per cent and crop sub-sector 0.74 per cent.”

“Other drivers included the construction sub-sector with a contribution of 0.51 per cent as well as accommodation and food services activities with a contribution of 0.36 per cent to the gross domestic product of the country in the first quarter of 2024,” he said.

Growth empty

Analysing the GDP data, Professor Bokpin stated that “this growth is neither inclusive nor an avenue which will see jobs being created”. 

He contended that the only positive was that it was peaking up more than the IMF predicted but extremely insufficient to sustain the livelihoods of ordinary Ghanaians, adding that “giving the hardship Ghanaians are going through, the level of taxes they are paying, the sacrifices Ghanaians have had to make, for the country to have a future we should be moderate in touting this growth,” he stated.

He argued that the government must build on this growth by ensuring its sustainability through ensuring that the growth was driven by labour intensive sectors of the economy.

“The most important thing is how do we build on this momentum and how do we make it sustainable, but more importantly how do you ensure that the growth is driven by the labour-intensive sub sectors of the economy, that is what is important,” he told the Graphic Business.

He urged the government to focus on sectors of the economy where the majority of Ghanaians derive their livelihoods from.


“The days where we celebrated jobless growth are over, bear in mind this growth is coming at a great cost to Ghanaians, households and the private sector, in terms of the austerity measures we are going through just for the government to repair its balance sheet,” he noted.

Sympathy and caution

He revealed that in 2018 the IMF and World Bank ranked Ghana’s economy among the 10 fastest-growing economies in the world and projected that it was expected to be the fastest-growing in 2019, but that was not to be due to external shocks, corruption and mismanagement.

“We should therefore be cautious and sympathise with the plight of Ghanaians instead of making merry. These are positive signs but it calls for cautious celebration,” he noted.

He added that this should be an incentive for the government and the state to work hard and be disciplined, saying this 4.7 per cent growth came at a great cost to Ghanaians as they were made to pay a higher prize through the Domestic Debt Exchange Programme (DDEP), External Debt Restructuring Programme and higher taxes.


Growth nominal and cosmetic

For his part, Dr Richmond Atuahene says there can be no GDP growth without a turnaround in agriculture and noted what was being touted was nominal GDP growth, which doesn’t reflect the true state of the economy.

“I don’t believe in those jargons. When we talk about growth, one must be specific, is it a nominal growth or a real growth. If it is real growth you must deduct inflation from the growth and ascertain if you are performing above the real inflation. This is basic economics,” he told the Graphic Business.

He challenged the government to factor in inflation together with the nominal GDP and bring an accurate picture of the nation’s real growth.

“When you go to advanced countries such as Britain, they don’t work with nominal figures, they deduct inflation from the nominal figures to ascertain the true growth of the economy,’ he stated.


“You can’t have inflation at 23 per cent and say you are growing 4.7 per cent. No, that can’t happen,” he told the Graphic Business.

Nominal and Real growth

He urged the government to release the real growth figures which will be a true picture of the economy.

According to him the regrowth happens when nominal growth is discounted by inflation to provide a true picture of the economy.

He mentioned the currency depreciation as one of the factors that should inhibit a 4.7 per cent Gross Domestic Products (GDP).

“According to Bloomberg, we have the worst currency in Sub-Saharan Africa, that is a big factor in slowing your economy and growth,” he noted.

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