Economic Growth: Ghana’s GDP Growth Rate Under Mahama and Akufo-Addo. Here are the Facts

The argument of who are better managers of the economy, between the governing New Patriotic Party (NPP) and leading opposition National Democratic Congress (NDC), is central to the campaign messages of the two main political parties in the lead up to the December elections.

Globally, economic growth which measures the monetary value of all goods and services produced within a country in a specific period, is a major distinguishing indicator of a thriving or a failing economy. Knowing its significance, the presidential candidates and party communicators of both the NPP and NDC on several platforms have attempted to project their records in terms of economic growth ahead of each other.

On February 20, at the State of the Nation Address (SONA), President Akufo-Addo, basing on the growth of the gross domestic product (GDP), said Ghana’s economy is among the fastest-growing in the world.

“Our economic growth has rebounded to place Ghana among the fastest growing economies in the world for three years in a row at an annual average of 7%, up from 3.4% in 2016, the lowest in nearly three decades,” Akufo-Addo said.

The President reiterated this claim when he visited the Federal Assembly of the Swiss Confederation in Bern, Switzerland, a week later, as part of a two-day State visit.

The former President and Flagbearer of the NDC, John Dramani Mahama, has also touted the superior capabilities of his party in handling the economy referring to the rate of economic growth recorded during his tenure, 2013-2016.

At the launch of the NDC’s campaign for the 2o2o elections in Sefwi Wiawso in the Western North region on October 7, the former president berated the incumbent for adding less value to GDP growth of the country.

“According to the facts, during my first term as President, we had an economic growth of almost $14 billion,” John Mahama said. “Ghana’s GDP in 2020 is projected to be somewhere around $59 billion. This means that the current NPP government-managed an economic growth of only $4 billion in four years. This is the difference between us and them: we delivered $14 billion growth in four years, while they delivered only $4 billion growth in four years.”

Fact-check Ghana has also published reports on claims on economic growth made by key personalities in both the NPP and NDC, including Felix Ofosu Kwakye, the former deputy information minister of the erstwhile NDC government, and Gabby Otchere Darko, a leading member of the NPP.

But what are the key facts on Ghana’s records on economic growth, comparing the tenures of the Mahama-led government and the incumbent Akufo-Addo-led government? Below are the facts.

Economic growth is measured by the growth in GDP which is the percentage change in the value of all of the goods and services produced in a nation during a specific period of time, as compared to an earlier period.

While GDP is measured in monetary value (eg. Ghs 51 billion), growth of GDP year-on-year is expressed in percentages. According to the Ghana Statistical Service, the institution that computes Ghana’s GDP, real GPD growth is currently computed with 2013 as the base year. This is to eliminate the impact of rising prices on the GDP to ensure accurate measurement.

According to data from the World Bank which is corroborated by data from the annual budget statements delivered by the Finance Ministers in parliament, below is a comparison of monetary value of the GDP and GDP growth rates recorded under the tenure of the Mahama-led NDC government and the incumbent Akufo-led NPP. The monetary value of GDP is quoted in nominal or current prices.

Source: World Bank, Ministry of Finance *Projected figure in 2020 Midyear review budget statement

From table 1 above, under the Mahama-led NDC government (2013-2016), Ghana recorded its highest GDP growth, 7.313%, in the first year of government’s administration, 2013. The country could not attain that growth again under the former President’s tenure, with the subsequent years falling drastically.

Under the incumbent Akufo-Addo NPP government (2017-2020) (see table 2), Ghana attained its highest GDP growth in 2017, 8.143%, which was also the government’s first year. Despite the GDP growth falling in the subsequent years, its fall is less, relative to the Mahama-led government. The GDP growth rate projected for 2020, 0.9%, is the lowest, which many attribute to the negative impact of the COVID-19 pandemic on Ghana’s economy.

Further, under the Mahama-led NDC government, Ghana recorded an accumulated GDP growth of 15.836 which translates into an average of 3.959% growth every year. The incumbent Akufo-led government has recorded an accumulated growth of 21.784% which translates into an average of 5.446%. This indicates that the GDP of Ghana has grown higher under the incumbent NPP government than the NDC.

Based on Ghana’s GDP growth recorded in 2017 and 2018, the International Monetary Fund (IMF) in its 2019 World Economic Outlook Report placed Ghana among the fastest-growing economies in the world.