Africa’s likely star economic performer this year isn’t in much doubt, according to all three of the international lenders focusing on the continent.
Ghana’s post-election upswing now is looking so strong that the country is poised to take the lead as Africa’s fastest-growing economy this year — for the first time in at least three decades.
Expansion in West Africa’s second-biggest economy in 2018 should surpass that of recent champions Ethiopia and Ivory Coast, according to forecasts from the World Bank, the African Development Bank — both released in the past month — and the International Monetary Fund.
Commodities including oil, gold and cocoa are the mainstay of the $43 billion economy and rising crude output is boosting the nation’s finances. But a year after the government of President Nana Akufo-Addo took power, fiscal credibility, a recovery in credit growth and expansion outside the resources industry mean that the country’s standing isn’t just the result of growth slowing in Ivory Coast and Ethiopia.
“Ghana has a more diversified economy than a lot of its African peers,” Capital Economics Ltd. economist John Ashbourne said by email. “Ghana is doing very well — this isn’t just a matter of being the last man standing.”
Ghana’s growth booms and busts have been closely linked to crude since it became an oil producer in 2010, when Tullow Plc started the Jubilee field. Economic growth surged to 14.4 percent the following year, and slumped to less than 4 percent from 2014 to 2016 as oil prices dropped.
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“Ghana clearly is having an oil-fueled boom at the moment but non-oil growth is yet to pick up markedly. Its high debt-servicing cost will make it challenging to lift public capital investment despite a large infrastructure deficit compared to many peers.
Ghana is the world second-largest cocoa producer, lagging behind Ivory Coast, and produces the most gold on the continent after South Africa. The government is investing in agriculture and Akufo-Addo has pledged to set up factories in each of the nation’s 216 districts to diversify the economy.
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