Industry sector underperforms in 2022 due to high cost of doing business – Prof. Quartey

April 20, 2023

According to the latest data from the (GSS), the economy expanded by 3.1% in 2022, a lower growth rate than the government's forecast of 3.7%. The Services sector led the growth, followed by Agriculture and Industry.

However, Professor Peter Quartey, Director at the Institute of Statistical, Social and Economic Research, (), has attributed the poor performance of the Industry sector to high inflation and the high cost of doing business in the country.

Speaking to Joy Business, Professor Quartey explained that the high cost of doing contributed to the low performance of the Industry sector.

“As a business owner, if you want to produce, you will also want to look at the environment. If the exchange rate is depreciating rapidly, if inflation is going up if electricity tariffs are going up, fuel prices are rising, and if interest rates are going up before you go into production,” he said. All these factors affected industry performance in 2022.

Professor Quartey further stated that the factors affecting business in 2022 were not unexpected, as all macroeconomic indicators worsened. “There was a lot of market uncertainty. As an investor, despite all the policies of government, these factors will affect your production,” he explained.

He also mentioned that the high cost of living affected the purchasing power of consumers, causing the consumer to be overburdened. “Even if you are a producer, demand for your goods may come down,” he said.

The GSS provisional estimates indicate that the economy's growth rate in 2022 is below Ghana's average Gross Domestic Product (GDP) growth rate of 5.0% pre-.

Although the 3.1% growth rate is below the government's forecast of 3.7%, it exceeded most analysts' projections, including the , which had projected Ghana's economy to grow by 3.6% in 2022.

In terms of GDP growth rate by sector, the GSS data reveals that the Industry sector recorded a growth rate of 0.9%.

However, the Manufacturing sub-sector, Electricity, Water and Sewerage, and Construction sub-sectors contracted by -2.5%, -3.3%, -4.9%, and -4.0%, respectively.

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