FPSO shutdown hurts Ghana’s economic growth

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The Ghana Statistical Service (GSS) has reveled the shutdown of the Kwame Nkrumah FPSO in the second quarter of 2016 led to a slowdown in Ghana’s economic growth for that period.

Gross Domestic Product (GDP) figures released by the GSS today [Wednesday] revealed that Ghana’s economy in the second quarter of 2016 grew by 2.5% compared with the revised 3.8 percent it recorded in same period in 2015.

The provisional quarter –on-quarter GDP growth rate for the second quarter of 2016 was negative 0.6 percent which represents an estimated 8.851.3 million cedis in constant terms compared with 8.531.4 million cedis in the first quarter of 2015.

The GDP measures the value of goods and services created over a period. In constant terms the provisional second quarter Non Oil GDP for 2016 was a little above 7.94 million cedis compared with some 7.48 million cedis recorded in the second quarter of 2015.

The services sector led growth recording 6.0%, followed by the agriculture sector with 4.1% while Industry saw a decline recording a negative growth of negative 5% year – on – year.

Government Statistician Dr Phelomina Nyarko explains ‘the economy is growing but not at the same rate as in the first quarter, when it was 4.8 percent unrevised. The growth was driven by the services sector which saw huge increase what is interesting is that the hotel & Restaurant and Information & Communication lead growth with 11% for both.”

There were some contractions and the main drivers that saw the contraction year on year of the second quarter growth in 2016 were the Water and Sewerage sector which grew by negative 6.0%, and mining and quarry which also grew by negative 29.0%.

Government Statistician Dr Phelomina Nyarko explains “the slowdown in the second quarter was mainly due to a halt in oil production on the first FPSO of Ghana which I understand was caused by a technical fault at Ghana’s main production vessel. This was coupled by the manufacturing sector as the growth within the mining and quarry sector went down by 29% attributed to oil and gas which also fell by 49%. Also industry sector, manufacturing especially was hit due to drop in oil prices on the world market.”

Meanwhile some sectors saw double digit positive growth. They are Electricity growing by 11.7%, Hotels & Restaurants growing by 11.6% and Information & Communication by 11.0%.

GDP estimates including oil at purchaser’s value for the second quarter was little above 38.16 million cedis compared to 32.28 million cedis recorded in the 2015 second quarter.

Non oil GDP also saw an increase in the second quarter of 2016 from the 30.48 million cedis in the second quarter 2015 to the 37.76 million cedis.

Also quarter on quarter real GDP figures show the country’s GDP shrunk to the 2.5 percent in the second quarter of 2016 from the 4.8 percent recorded in the first quarter of 2016.

 

Source: citifmonline

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