Ghana’s industrial sector has achieved a remarkable 457% growth turnaround, rebounding from a contraction of -2.6% in Q2 2023 to an impressive 9.3% growth in Q2 2024, according to the Bank of Ghana’s (BoG) Summary of Macroeconomic and Financial Data.
This recovery, driven by robust performances in mining, oil and gas, and construction, highlights industry as the fastest-growing sector in the economy despite persistent structural challenges.
The industry’s growth trajectory has been extraordinary compared to agriculture and services. While agriculture showed steady but moderate growth, rising from 4.4% in Q2 2023 to 5.4% in Q2 2024, and services saw a drop from 6% to 5.8% during the same period, the industry recorded a massive leap, jumping from a contraction of -2.6% to its current high of 9.3%.
The mining and quarrying subsector, led by gold production, has been a significant contributor, with a growth of 23.6% in the second quarter of 2024. Large-scale mining projects such as the Cardinal Namdini mine, which is projected to produce over 350,000 ounces of gold annually, have strengthened the sector’s performance.
Oil and gas also recorded strong growth of 9.9% in the first half of the year, driven by increased production and favourable global prices. Meanwhile, construction maintained consistent momentum with growth of 8.3%.
Despite these gains, structural deficiencies continue to weigh heavily on the sector, making sustained growth challenging.
Persistent issues such as inadequate infrastructure, unreliable power supply, and limited access to affordable financing constrain industrial activities.
Additionally, producer inflation, which rose sharply earlier this year due to high costs of raw materials and energy, has increased production costs, placing further pressure on manufacturers and other industrial players.
While manufacturing has shown signs of recovery, with 2.8% growth in the first half of the year, the subsector continues to struggle with competition from cheaper imports and high operating costs. These challenges underscore the need for targeted policies to address the structural bottlenecks hampering the sector’s full potential.
The industry’s strong performance stands out in comparison to agriculture and services, which recorded more moderate growth rates of 4.5% and 5.1% respectively in the most recent quarter.
However, the high growth rates in the industry must be understood within the context of its recovery from earlier contractions, highlighting the sector’s vulnerability to economic shocks.
Addressing the structural issues, it is noted, will be critical to ensuring the sector’s continued contribution to the broader economy and its ability to maintain its current momentum.
